The basis of an asset on which $20,000 has been expensed under § 179 will be reduced by $20,000 even if $20,000 cannot be expensed in the current year because of the taxable income limitation.

Question

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According to the IRS, the basis of an asset is reduced by the full amount expensed under § 179, regardless of any taxable income limitation in the current year. This reduction applies in the year the property is placed in service.

The Basis of an Asset on Which $20,000 Has Been