In 2018, Steve purchases $975,000 of equipment. The taxable income of the business before any Section 179 deduction is $10,000. What is Steve's maximum Section 179 deduction in 2018?
A)$10,000
B)$- 0 -
C)$25,000
D)$975,000
E)$500,000

Question

Quizplus · Accepted Answer

The maximum Section 179 deduction cannot exceed the taxable income of the business before the deduction. Since Steve's business has a taxable income of $10,000 before any Section 179 deduction, the maximum deduction he can claim is $10,000, regardless of the cost of the equipment purchased.

In 2018, Steve Purchases $975,000 of Equipment