Rodriguez Corporation acquired 7-year property costing $450,000 on October 1, 2019.This is the only property acquired this year and Rodriguez elects to expense the maximum amount under Section 179 without applying bonus depreciation.Rodriguez's income before deducting depreciation is $320,000.What is the maximum amount that Rodriguez can deduct in 2019 for Section 179 expensing?
A)$25,000
B)$130,000
C)$320,000
D)$450,000

Question

Quizplus · Accepted Answer

The maximum amount that Rodriguez can deduct in 2019 for Section 179 expensing is limited to its taxable income before the deduction, which is $320,000. Section 179 allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year, up to a certain limit, but the deduction cannot exceed the business's income.

Rodriguez Corporation Acquired 7-Year Property Costing $450,000 on October 1