Littman LLC placed in service on July 29, 2016 machinery and equipment (7-year property) with a basis of $600,000. Littman's income for the current year before any depreciation expense was $100,000. Which of the following statements is true to maximize Littman's total depreciation expense for 2016? (Assume that the 2015 §179 limits are identical to 2016.)
A) Littman should take §179 expense equal to the maximum $500,000.
B) Littman should take no §179 expense.
C) Littman's §179 expense will be greater than $100,000.
D)Littman's §179 expense will be less than $100,000.
E)None of these

Question

Quizplus · Accepted Answer

Littman's §179 expense is limited to the taxable income before the deduction, which is $100,000. Therefore, the §179 expense will be less than $100,000.

Littman LLC Placed in Service on July 29, 2016 Machinery