Indicate by I if the following is an increase in taxable income to determine current earnings and profits or D if it is a decrease in taxable income in determining current earnings and profits.
-Section 179 expense in excess of allowable depreciation

Question

Quizplus · Accepted Answer

Section 179 expense allows businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year rather than requiring the cost to be capitalized and depreciated. When the Section 179 expense taken is in excess of the allowable depreciation, it reduces taxable income more than standard depreciation would. Therefore, for purposes of calculating current earnings and profits, this excess must be added back, resulting in an increase in taxable income.

Indicate by I If the Following Is an Increase in Taxable