On July 10, 2012, 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 2012, assuming Ariff's § 179 business income is $110,000. Ariff does not take additional first-year depreciation.
A)$2,960.
B)$25,000.
C)$34,000.
D)$70,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The maximum deduction for 2012 would be calculated as follows:

First, calculate the maximum § 179 deduction: 
$110,000 (Ariff's business income) - $560 (the phase-out threshold) = $109,440 maximum § 179 deduction.

The cost of the SUV ($70,000) is less than the maximum § 179 deduction, so Ariff can deduct the full cost of the SUV: 
$70,000 SUV cost.

Since Ariff does not take additional first-year depreciation, the total deduction for the SUV in 2012 is: 
$70,000 SUV cost.

Therefore, the correct answer is C) $34,000.

On July 10, 2012, Ariff Places in Service a New