On July 10,2015,Ariff places in service a new sports utility vehicle that cost $70,000 and weighed 6,300 pounds.The SUV is used 100% for business.Determine Ariff's maximum deduction for 2015,assuming Ariff's § 179 business income is $110,000.Ariff does not take additional first-year depreciation (if available).
A)$2,960
B)$25,000
C)$34,000
D)$70,000
E)None of the above

Question

Quizplus · Accepted Answer

Since the SUV weighs more than 6,000 pounds, it qualifies for the full § 179 deduction of $25,000 for vehicles placed in service in 2015. However, the maximum deduction allowed for vehicles used 100% for business is limited to the business income of the taxpayer. Therefore, Ariff's maximum deduction for 2015 is $34,000, which is the lesser of the § 179 deduction limit and his business income.

On July 10,2015,Ariff Places in Service a New Sports Utility