Allen Corporation acquired 5-year property costing $150,000 on September 10, 2019.This is the only property acquired this year and Allen elects to expense the maximum amount under Section 179.Allen's income before deducting depreciation is $15,000.What is the maximum amount that Allen can deduct in 2019 for Section 179 expensing?
A)$10,000
B)$15,000
C)$25,000
D)$150,000

Question

Quizplus · Accepted Answer

The maximum amount that Allen can deduct under Section 179 is limited to its taxable income before the deduction, which is $15,000. Section 179 allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year, but the deduction cannot exceed the business's income.

Allen Corporation Acquired 5-Year Property Costing $150,000 on September 10