Pyle Inc., a calendar year taxpayer, generated over $10 million taxable income in 2013. 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 2013 cost recovery deduction.

Question

Quizplus · Accepted Answer

Pyle can elect to expense the entire cost of the equipment under Section 179, up to the limit for the year. Since the equipment cost is $322,000 and Pyle's taxable income is over $10 million, they can deduct the full $322,000 as a Section 179 expense.

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