A limitation exists on the annual amount of deductible depreciation for passenger automobiles. The limitation rules include which of the following?
I.If the automobile is used less than 100% for business, the annual limitation amount is reduced by multiplying it by the business-use percentage.
II.Section 179 expensing is available for passenger automobiles, but often is not advantageous.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

A limitation exists on the annual amount of deductible depreciation for passenger automobiles. The limitation rules include which of the following?
I.If the automobile is used less than 100% for business, the annual limitation amount is reduced by multiplying it by the business-use percentage.
II.Section 179 expensing is available for passenger automobiles, but often is not advantageous.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Both statements are correct. Statement I accurately describes how the annual depreciation deduction for a passenger automobile is limited based on the percentage of business use. Statement II is correct in noting that while Section 179 expensing is available for passenger automobiles, its applicability is often limited by specific dollar caps, making it less advantageous in many cases.

A Limitation Exists on the Annual Amount of Deductible Depreciation