On January 1, 2019, Sandy, a sole proprietor, purchased for use in her business a used production machine (7-year property) at a cost of $4,000. Sandy does not purchase any other property during 2019 and has net income from her business of $80,000. If the standard recovery period table would allow $572 of depreciation expense on the $4,000 of equipment purchased in 2019, what is Sandy's maximum depreciation deduction including the Section 179 election to expense (but not bonus depreciation) for 2019?

Question

Quizplus · Accepted Answer

Sandy can elect to expense the entire cost of the production machine ($4,000) under Section 179, assuming her business income is sufficient to cover the deduction, which it is ($80,000 of net income). This allows her to take the full purchase price as a deduction in the year of purchase, rather than depreciating the asset over its useful life. The standard recovery period table amount of $572 is not relevant when taking the Section 179 deduction.

On January 1, 2019, Sandy, a Sole Proprietor, Purchased for Use