B&P Inc., a calendar year corporation, purchased only one operating asset during 2020: $599,900 of used computer equipment (5-year recovery property) placed in service on March 18. Assuming that B&P makes a Section 179 election, compute B&P's adjusted tax basis in the property at the end of 2020.
A) $99,900
B) $71,920
C) $79,920
D) $0

Question

Quizplus · Accepted Answer

B&P Inc. can elect to expense the entire cost of the used computer equipment under Section 179, up to the limit for the year. Since the equipment cost is $599,900 and is within the Section 179 limit, B&P can deduct the full amount, leaving an adjusted tax basis of $0 at the end of 2020.

B&P Inc, a Calendar Year Corporation, Purchased Only One Operating Asset