Question

T or F The 179 deduction can exceed 1,020,000 in 2019 if the taxpayer has a 179 amount that exceeded the taxable income limitation in the prior year

2: Alicia was involved in an automobile accident in 2019. Her car was used 60% for business and 40% for personal use. The car had originally cost $40,000. At the time of the accident, the car was worth $20,000 and Alicia had taken $8,000 of depreciation. The car was totally destroyed and Alicia had let her car insurance expire. If Alicia’s AGI is $50,000 (before considering the loss), determine her itemized deduction for the casualty loss. a: $34,000; $0 b: $50,000; $0 c: $34,000; $4,500 d: $26,000; $5,700 e: none of these

Answer 1

1. False

2. c: $34,000; $4,500

Step-by-step explanation:

1. The given statement is false

As for the 179 deduction, the maximum amount allowed is $1,000,000 and it cannot be greater than this in any of the case

2. Particulars Business Personal

Cost $24,000 $16,000

($40,000 × 60%) ($40,000 × 40%)

Less: depreciation -$8,000 $0

Basis $16,000 $16,000

Fair market value $12,000 $8,000

Loss: $16,000 $8,000

AGI before loss $50,000

Less: Business loss -$16,000

AGI $34,000

Personal casuality loss $8,000

Less: $100 floor -$100

ANd 10% of AGI -$3400

Deduction itemized $4,500

Hence, the correct option is c.