On June 21, 2018, Duckwall Co. purchased and placed in service $3,185,000 of 5-year recovery property...

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Accounting

On June 21, 2018, Duckwall Co. purchased and placed in service$3,185,000 of 5-year recovery property (not an SUV). It is used100% for business and Is the only property placed in service duringthe year.
What is the maximum cost recovery deduction available ifthe Duckwall Co.? has taxable income of $1.5 million before thecost recovery deduction?
The Duckwall Co. does not elect out of Section 179 expensing orthe additional first-year deprecation deduction.
A.   $1,722,000
B.   $3,185,000
C.   $2,037,000
D.   $1,500,000

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3.8 Ratings (624 Votes)

Answer is D 1500000 Explanation Tax Year 2018 Business Usage 100 Since Business usage is 100 Cost basis 3185000 x 100 3185000 Note Section 179 is generally taken first followed by Bonus Depreciation a Section 179 depreciation Section 179 of the IRS tax code allows small businesses to deduct the entire or full purchase price of the Qualifying assetproperty However the maximum amount of deduction a business can cliam under this section is 1000000 In 2018 provided the See Answer

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