Ilene owns an unincorporated manufacturing business.In 2015,she purchases and places in service $206,000 of qualifying five-year equipment for use in her business.Her taxable income from the business before any Sec.179 deduction is $17,000.Elaine takes the maximum allowable deduction under section 179.Which of the following statements is true regarding the Sec.179 election?
A)Ilene can deduct $25,000 as a section 179 deduction in 2015,with no carryover to next year.
B)Ilene can deduct $19,000 as a section 179 deduction in 2015.
C)IIene can deduct $17,000 as a section 179 deduction in 2015; $2,000 may be carried over to next year.
D)Ilene can deduct $17,000 as a section 179 deduction in 2015 ,with no carryover to next year.

Question

Quizplus · Accepted Answer

The maximum Section 179 deduction for 2015 is $25,000, but Ilene's taxable income before any Section 179 deduction is only $17,000. Therefore, she can only deduct up to $17,000 in Section 179 in 2015. Since she can't deduct the full $206,000 cost of the equipment, she will have a carryover amount of $2,000 to deduct in the following year. Therefore, Ilene can deduct $17,000 as a Section 179 deduction in 2015, and $2,000 may be carried over to next year.

Ilene Owns an Unincorporated Manufacturing Business