The basis of an asset on which $500,000 has been expensed under § 179 will be reduced by $500,000,even if $500,000 cannot be expensed in the current year because of the taxable income limitation.

Question

Quizplus · Accepted Answer

This statement is true. When a taxpayer elects to expense an asset under § 179, the basis of the asset is reduced by the amount of the expense. This reduction in basis is not affected by whether or not the full amount of the expense can be taken in the current year due to taxable income limitations.

The Basis of an Asset on Which $500,000 Has Been