On July 10,2016,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 2016,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 cost $70,000, Ariff can use the full §179 deduction limit of $25,000 in 2016. Therefore, his maximum deduction for 2016 would be $25,000. However, since the SUV weighed more than 6,000 pounds, he can also deduct an additional $9,000 for the SUV using bonus depreciation. The total deduction would be $34,000 (§179 + bonus depreciation). Therefore, the answer is C.

On July 10,2016,Ariff Places in Service a New Sports Utility