Question

Which of the following assets purchased in the current year are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations?

Rex’s Wrecks purchased $561,000 in new equipment during 2017. Rex wants to use Section 179 to expense the maximum amount of the purchase. How much will Rex get to expense under Section 179 and what will be the adjusted basis of the assets for calculating MACRS depreciation expense?

Answer 1

Question 1 Completion with Options:

A. used equipment

B. storage warehouse

C. land for future building site

D. new office furniture

E. apartment complex

F. new delivery truck

Answer:

1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:

A. used equipment

D. new office furniture

F. new delivery truck

2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS

Step-by-step explanation:

There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.