Laven Company, a calendar year taxpayer, purchased a total of $561,240 new depreciable personalty during 2016. Which of the following statements is true?

Question

Quizplus · Accepted Answer

Under Section 179 of the IRS Code, a taxpayer can elect to expense up to $500,000 of the cost of new depreciable property placed in service during the tax year. The remaining cost can be capitalized and is subject to 50% bonus depreciation and MACRS depreciation. Therefore, Laven can expense $500,000 and capitalize $61,240 for depreciation purposes.

Laven Company, a Calendar Year Taxpayer, Purchased a Total of $561,240