During 2016,Linda has a $12,000 net loss from her beauty salon.Her spouse,Bart,earns $23,000 as a tennis professional.During 2016,Bart purchases $215,000 of Section 179 equipment for his business.What is the amount of Linda and Bart's Section 179 deduction for 2016?

Question

Quizplus · Accepted Answer

Linda's net loss from her beauty salon cannot be used to offset Bart's income as a tennis professional. Therefore, Bart's Section 179 deduction would be calculated based solely on his equipment purchases, which is $215,000. However, the maximum Section 179 deduction allowed for 2016 is $500,000. Since their combined income does not exceed the threshold ($505,000), they are eligible for the maximum deduction of $11,000 ($500,000 - $215,000 - $274,000). Therefore, the correct answer is (C) $11,000.

During 2016,Linda Has a $12,000 Net Loss from Her Beauty