Pyle Inc., a calendar year taxpayer, generated over $10 million taxable income in 2011. Pyle made one asset purchase: new transportation equipment costing $322,000. The equipment has a 5-year recovery period and was placed in service on February 9. Assuming that Pyle made the Section 179 election with respect to the equipment, compute Pyle's 2011 cost recovery deduction.

Question

Quizplus · Accepted Answer

Pyle Inc. can elect to expense the full cost of the equipment under Section 179, up to the limit for that year. In 2011, the Section 179 limit was $500,000, so Pyle can deduct the full $322,000 cost of the equipment.

Pyle Inc, a Calendar Year Taxpayer, Generated Over $10 Million Taxable