AS FAR AS MY RESEARCH SHOWS ME, THE 2014 AND 2015 SECTION 179 LIMITS ARE DIFFERENT. HOW AM I SUPPOSED TO ANSWER A QUESTION LIKE THIS IF I ONLY KNOW THE 2015 SECTION 179 AMOUNT OF $25,000?
On February 1, 2014, Pam Baker purchased a $161,000 machine (5-year property) for use in her business. Pam expensed $161,000 under Section 179 in addition to the regular depreciation of 20% in 2014 and 32% in 2015. Pam's total deductions for 2014 and 2015 for the machine are:
Select an answer:
A.
$161,000 (2014) and $0 (2015).
B.
$67,800 (2014) and $108,480 (2015).
C.
$7,800 (2014) and $12,480 (2015).
D.
$32,200 (2014) and $51,520 (2015).
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Pam's 2014 deduction is:
Section 179 $161,000
20% x ($161,000 – $161,000) 0
——–
$161,000
Pam's 2015 deduction is:
32% x ($161,000 – $161,000) = $ 0
Note
The 2014 IRC Section 179 deduction was $500,000/$2,000,000 with a 50% bonus depreciation. On 1/1/15 the extension for 2014 lapsed and is now at $25,000/$200,000 with 0% bonus depreciation. These amounts are currently being debated in Congress.
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