Which of the following statements regarding the Sec. 179 deduction is not true?
A. The maximum cost that is deductible for 2012 is $139,000.
B. The amount expensed cannot exceed the taxable income derived from any trade or business during the tax year.
C. The maximum deductible amount is reduced if property placed in service during the tax year exceeds $2,000,000.
D. The amount that is not deductible due to the taxable income limitation can be carried forward.
I am a bit confused why the answer is A
Answer (A) is correct.
There are several limitations on the deduction allowed by Sec. 179. One limitation is taxable income and, to the extent that causes an amount to be nondeductible, such amount may be carried forward to be deducted in future years. This carryover is subject to all the limitations as if it were an expense of the current year. The maximum cost that is deductible for 2012 is $500,000. This amount is reduced if the Sec. 179 property placed in service during the year exceeds $2,000,000.
I thought for 2012 its 139,000 and for 2013 its 500,000
FAR 05/27/14; 786/110 - Done !
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