Sally purchased new equipment for her consulting business. She allocates the Section 179 deduction among the new assets. One piece of equipment cost $112,500 and was allocated one-half of the allowable Section 179 deduction and therefore has a depreciable basis of $100,000.

Question

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The depreciable basis of the equipment is $100,000, which is less than its cost of $112,500. This indicates that a portion of the cost has been deducted as a Section 179 deduction.

Sally Purchased New Equipment for Her Consulting Business