[j3w3ly]

Question from Becker:

White Company acquires a machine (seven-year property) on January 10 of the current year, at a cost of $950,000. It was the only purchase of machinery White made in the current year. White makes the election to expense the maximum amount under §179. No election is made to use the straight-line method. Determine the total §179 deduction related to the machine for the current year assuming White has taxable income of $700,000 and assuming the rules in effect for the year 2014:

Solution:

2014 Maximum allowable §179 deduction $ 25,000

Reduction:

Purchases $ 950,000

2014 Max. Allowed (200,000)

Excess 750,000

Allowable §179 deduction $ 0

I don’t understand this at all. I thought the maximum allowed was $500,000? And the $25,000 was for SUVs (which is not the case here). Is this due to the recent Becker update to 2014?

BEC - 84
AUD - 95
REG - 86
FAR - 7/11/14

[CPA soon]

I thought it changed in 2014 but the IRS website doesn't seem to show a change. Not quite sure, I thought I read somewhere that the limit is 25K now but I don't know!

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[j3w3ly]

So, going by 2013 rules (which is what I will be tested on) the deduction would be the full $500,000?

BEC - 84
AUD - 95
REG - 86
FAR - 7/11/14

[CPA soon]

ya 2013 was 500k, so if taking in May go by 500k

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[j3w3ly]

Ok, thank you. I'm taking REG Friday so this update is really going to screw up my reviewing. 🙁

BEC - 84
AUD - 95
REG - 86
FAR - 7/11/14

[CPA soon]

Haha trust me I know I took it in April lol.. will be learning the new rules in July.. Good luck!

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[Amay]

I am waiting for my NINJA update but my Becker review course, which is updated for 2014 says the limit is 25K with a 200K phase-out. I am a little confused by it as well.

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

Never mind. Jeff confirmed what I thought here: https://www.another71.com/cpa-exam-forum/topic/reg-section-179-expense

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Author]

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