W&F Company, a calendar year taxpayer, purchased a total of $2,004,700 tangible personalty in 2016. How much of this cost can W&F elect to expense under Section 179?
A) -0-
B) $4,700
C) $495,300
D) $25,000

Question

Quizplus · Accepted Answer

Section 179 allows taxpayers to expense up to $500,000 of tangible personal property placed in service during the tax year. However, this amount is reduced dollar-for-dollar by the amount of the taxpayer's total cost of qualifying property placed in service during the tax year that exceeds $2,010,000. Since W&F's total cost of qualifying property placed in service during 2016 is $2,004,700 - which is less than $2,010,000 - it can elect to expense the entire amount of $2,004,700 under Section 179. Therefore, the correct answer is C.

W&F Company, a Calendar Year Taxpayer, Purchased a Total of $2,004,700