Sally purchased new equipment for her consulting business. She allocates the Section 179 deduction among the new assets. One piece of equipment cost $1,000,000 and was allocated one-half of the allowable Section 179 deduction and therefore has a depreciable basis of $500,000.

Question

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This statement is true. Sally allocated one-half of the allowable Section 179 deduction to the equipment that cost $1,000,000, resulting in a depreciable basis of $500,000.

Sally Purchased New Equipment for Her Consulting Business