[ti807910]

Here is the question I was working on:

Martin, a calendar year corporation, purchased and placed into service evenly in the current year $530,000 of computer equipment. Martin’s business establishment was not in an economically distressed area, and Martin made a proper and timely expense election to deduct the maximum amount. What is Martin’s deduction under Section 179 assuming the rules in effect for 2012?

A. 30K

B. 95K

C. 106K

D. 125K

I got to Ninja notes for REG updated for 2013, pg 10, and it says “max deduction is $139,000 for max total equipment purchase of $560K” so I think, hmm, the equipment is not over 560K, so I think they can can $139K. That is not an option.

I select D on a whim.

Becker says: “For 2012, max amount that can be expensed is $125K, but that amount is reduced, dollar for dollar, for the amount the total related property placed into service in the year exceeds $500K. There is an excess of 30K, therefore the maximum allowable expense is answer B, 95K (125K-30K = 95K).

Which is the correct answer? I am guessing one of them is out of date though the IRS website suggests that nothing has changed. I tried to research online and it only confused me more:

https://www.law.cornell.edu/uscode/text/26/179

Can someone please tell me which one is the correct answer? I take REG on Friday. 🙁

FAR: 72, 68, 73, 78 (passed)
REG: 61, 70, 73, 63, 78 (passed)
AUD: 65, 84 (passed)
BEC: 89 (passed)

NASBA gave Doby a passing score, Doby is freeee!!

[SeattleAccountant]

Becker uses 125K/500 while Ninja's recommend 139/560 (for the exams up until July 2013; after that use updated amounts).

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[K_Sunshine5]

Hi @ti, here is a website where I found the 2012 amounts: https://www.section179.org/ I am guessing that (like @Seattle says) Becker uses the old 2012 limits. Since you will be taking your exam before July, use the 125/500k amounts. Hope this helps and good luck with your exam! Blow it out of the water and be done with this crazy process!

FAR: 65, 77!
AUD: 72, 72, 80!
REG: 64, 84!
BEC: 83!
Ethics: 98!

Delaware CPA as of May 23, 2014 at 10:43am EST.

"She believed she could, so she did."

[SeattleAccountant]

I'm not saying to use 125 but rather saying that Becker uses 125.

For Becker problems I did use 125 but when took Willey trial run a few days ago I've used 139 and Jeff had stated also to use 139 somewhere here on the forum when I've raised the same issue.

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[K_Sunshine5]

So use the 139/560 for the exam right now and if taking it in July?

FAR: 65, 77!
AUD: 72, 72, 80!
REG: 64, 84!
BEC: 83!
Ethics: 98!

Delaware CPA as of May 23, 2014 at 10:43am EST.

"She believed she could, so she did."

[ti807910]

haha, I am getting more confused… both Becker and Ninja Notes claim their amounts are correct for the 2012 year. I just want to know which one is right lol

FAR: 72, 68, 73, 78 (passed)
REG: 61, 70, 73, 63, 78 (passed)
AUD: 65, 84 (passed)
BEC: 89 (passed)

NASBA gave Doby a passing score, Doby is freeee!!

[SeattleAccountant]

Maybe shoot an email to your review provider just to be sure which numbers to use. I will use 139 for test tomorrow but then for July, the effective 2013 numbers are not 125 or 139, it is like 500/2mil I believe. So, better get it clarified before taking the test.

https://www.section179.org/

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[raymondsfamily]

Yikes, I was following what was in the NINJA notes $139k/$560k and now checking out the links in the posts here I am confused…thankfully my test won't be until mid-July but which threshold do we adhere to? Will this change come July?

F - 5/8/13 81
R - 74, 2/7/14 86
B - 74, 12/6/13 82
A - 70, 11/4/14 89!!!

I'm done 🙂 Many thanks to Jeff, A71 and Roger CPA!!!

MBA and CPA

[jeff]

The NINJA Notes were correct…the exam tests tax law changes 6 mo. after enactment…aka July.

The $139/560k was correct *for CPA Exam purposes*, no worries 🙂

[ti807910]

Thank you for the clarification. I got Becker January 2012 but it said it updated all the questions for me last month. Guess not.

FAR: 72, 68, 73, 78 (passed)
REG: 61, 70, 73, 63, 78 (passed)
AUD: 65, 84 (passed)
BEC: 89 (passed)

NASBA gave Doby a passing score, Doby is freeee!!

[Author]

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