On July 10, 2017, 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 2017, assuming Ariff's § 179 business income is $110,000. Ariff does not take additional first-year depreciation.
A)$2,960
B)$25,000
C)$34,000
D)$70,000
E)None of the above

Question

Quizplus · Accepted Answer

Since the SUV is used 100% for business, Ariff is eligible for a maximum Section 179 deduction of $25,000, as determined by the weight and cost limits. However, since his § 179 business income is $110,000, he can deduct the full $25,000. Therefore, Ariff's maximum deduction for 2017 is $34,000 ($25,000 + $9,000), which is the remaining cost of the SUV after the § 179 deduction.

On July 10, 2017, Ariff Places in Service a New