The only asset Bill purchased during 2017 was a new seven-year class asset.

The asset, which was listed property, was acquired on June 17 at a cost of $50,000.

The asset was used 40% for business, 30% for the production of income, and the rest of the time for personal use. Bill always elects to expense the maximum amount under Â§ 179 whenever it is applicable.

The net income from the business before the Â§ 179 deduction is $100,000.

Determine Bill's maximum deduction with respect to the property for 2017.

a. $1,428

b. $2,499

c. $26,749

d. $33,375

e. None of the above

Question

Mina Ponce

Business

6 July, 19:20

The only asset Bill purchased during 2017 was a new seven-year class asset.

The asset, which was listed property, was acquired on June 17 at a cost of $50,000.

The asset was used 40% for business, 30% for the production of income, and the rest of the time for personal use. Bill always elects to expense the maximum amount under Â§ 179 whenever it is applicable.

The net income from the business before the Â§ 179 deduction is $100,000.

Determine Bill's maximum deduction with respect to the property for 2017.

a. $1,428

b. $2,499

c. $26,749

d. $33,375

e. None of the above

+4

Answers (1)

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June · Answer 1

b. $2,499

Explanation:

The listed property does not pass the predominantly business usage test.

We cannot take 179 expensing or additional first-year depreciation (if available). In addition, only straight - line cost recovery can be used.

Maximum deduction = (50,000 *.0714 * 70%)

Maximum deduction = 2,499