In 2011, Rydin Company purchased one asset costing $48,400 and elected to expense the entire cost. However, Rydin could only deduct $21,000 of the Section 179 expense because of the taxable income limitation. In 2012, Rydin purchased tangible personalty costing $130,000. Rydin's taxable income without regard to any Section 179 deduction was $2,912,400. Compute Rydin's 2012 Section 179 deduction.

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The maximum Section 179 deduction for 2012 was $139,000. However, Rydin's taxable income without regard to any Section 179 deduction was over the $500,000 threshold, so the maximum deduction of $139,000 is reduced dollar-for-dollar by the amount that exceeds this threshold. In this case, the reduction is $130,000 ($2,912,400 - $500,000 = $2,412,400, which exceeds $139,000 by $130,000). Therefore, Rydin's Section 179 deduction for 2012 is $9,000 ($139,000 - $130,000).

In 2011, Rydin Company Purchased One Asset Costing $48,400 and Elected