[Anonymous]

I was doing a question and I am confused about the threshold.

The question says:
Assume Sec 179 deduction limit is 500,000 and businesses exceeding a total of $2Million of purchases in qualifying equipment deduction phase out dollar-for-dollar.

Equipment in the amount of 600,000 was purchased this year. Taxable income before 179 was $940,000. Total purchases of qualifying personal property was $2,110,000 during the current year.

I answered “$390,000”, because I thought 500,000-(2,110,000-2,000,000)=390,000.

But the answer used 500,000-(2,110,000-2,010,000) =400,000.

I know Becker’s book used 2,010,000 as well, but since the question tells you to use 2,000,000, shouldn’t we use 2M only instead of 2.01M?

Can anyone help me? Thanks a lot!

[A]

IRS.gov states a limit of $2,010,000, effective as of 1/2017.

B - 77 (2.27.16)
A - 81 (4.18.16)
R -
F -

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[Author]

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