[JustKeepStudying]

NINJA Question –

The question states:

A taxpayer purchased and placed in service during the year a $761,000 piece of equipment. The equipment is 7-year property. The first-year depreciation for 7-year property is 14.29%. There is an allowable Section 179 limit in 2014 of $25,000. What amount is the maximum allowable depreciation without using bonus depreciation?

The answer options are:

A. 25,000

B. 105,174

C. 130.174

D. 108.174

The “correct” answer is C $130,174 ($25,000 of 179 + (761,000*.1429 first year))

My concerns/question is that there is a limitation for the dollar amount of acquisitions that the 179 is reduced dollar for dollar after $200,000 of assets is put into place. Therefore, shouldn’t the full $25k 179 be disallowed, making the correct answer D $108,174??

Am I supposed to assume the phaseout is disregarded because the question states “allowable limit…” Doesn’t that go against the purpose of people learning what has phaseouts and what doesn’t, if the question is just going to go against what the actual rule is?

FAR - 84.
AUD - X,X,76.
REG - X,X,75.
BEC - X,X,74*, 81 AND IM DONE!!!!!!

*if i dont pass, i lose FAR.

Study materials: Becker videos/MCQ/Books, NINJA Blitz helped to finally pass AUD and REG.

First exam was in May 2013, seems like so long ago - FINALLY DONE!!!

[jeff]

Sorry about this – It's an error that's getting updated with the rollout of the 2015 material. It's tripped others up as well.

[JustKeepStudying]

No worries Jeff, I just know how tricky they like to be and I always get tripped up on wording so I wanted to make sure that wasn't the reasoning.

Thanks for responding!

FAR - 84.
AUD - X,X,76.
REG - X,X,75.
BEC - X,X,74*, 81 AND IM DONE!!!!!!

*if i dont pass, i lose FAR.

Study materials: Becker videos/MCQ/Books, NINJA Blitz helped to finally pass AUD and REG.

First exam was in May 2013, seems like so long ago - FINALLY DONE!!!

[Author]

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