On July 10, 2019, Ariff places in service a new SUV that cost $70,000 and weighed 6,300 pounds.The SUV is used 100% for business.Determine Ariff's maximum deduction for 2019, assuming Ariff's § 179 business income is
$110,000.Ariff does not take additional first-year depreciation.

Question

Quizplus · Accepted Answer

Since the SUV weighs more than 6,000 pounds, it is not subject to the luxury auto limits. Ariff can use the section 179 deduction up to a maximum of $25,000 and the remaining cost is depreciated using MACRS. Ariff's maximum §179 deduction for 2019 is limited to the taxable income of his business, which is given as $110,000. Therefore, Ariff can deduct $34,000 ($70,000 - $25,000) in 2019 ($25,000 section 179 deduction and $9,000 MACRS depreciation).

On July 10, 2019, Ariff Places in Service a New