Broadus., a calendar year taxpayer, purchased a total of $128,300 tangible personalty in 2016. Broadus' taxable income without regard to a Section 179 deduction was $92,600. Which of the following statements is true?
A) Broadus can elect to expense only $92,600 of the cost of the personalty.
B) Broadus can elect to expense the $128,300 cost of the personalty but can deduct only $92,600 of the expense.
C) Broadus can elect to expense only $35,700 of the cost of the personalty.
D) Broadus can elect to expense the $128,300 cost of the personalty but can deduct only $35,700 of the expense.

Question

Quizplus · Accepted Answer

The Section 179 deduction is limited to the taxpayer's taxable income, so Broadus can elect to expense the full cost but can only deduct up to $92,600.

Broadus, a Calendar Year Taxpayer, Purchased a Total of $128,300