On July 10,2013,Ariff places in service a new sports utility vehicle that cost $70,000 and weighed 6,300 pounds.The SUV is used 100% for business.Determine Ariff's maximum deduction for 2013,assuming Ariff's § 179 business income is $110,000.Ariff does not take additional first-year depreciation.

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Since the SUV is used 100% for business, Ariff can deduct the full cost of the SUV under Section 179. However, the maximum deduction allowed under Section 179 for 2013 is $500,000 and the deduction begins to phase out dollar-for-dollar when the total cost of qualifying property placed in service during the year exceeds $2 million.

Since the cost of Ariff's SUV is $70,000, which is below the $500,000 limit, he can deduct the full cost of the SUV under Section 179.

However, the maximum deduction allowed under Section 179 for Ariff is limited to his § 179 business income, which is $110,000. Therefore, his maximum deduction for the SUV would be $70,000 (the cost of the SUV) or his § 179 business income of $110,000, whichever is lower. So, Ariff's maximum deduction for 2013 is $34,000 (his § 179 business income).

On July 10,2013,Ariff Places in Service a New Sports Utility