[Anonymous]

Hello gang,

I came upon this road block when I did Ninja reg SIM 21. I know you can deduct up to $25,000 in S. 179 as long as the property placed under service is under $200K and is depreciable personal property. Here is what stumped me when doing SIM 21.

Furniture and equipment costing $12K was placed into service on 6/15/14. The entire amount was expensed under S. 179. I get that.

PC’s and peripheral equipment costing $14K was placed into service on 6/18/14. In my mind I can expense the additional $12K under S. 179 and the depreciable base under MACRS would now by $1K. The SIM indicates no additional S.179 deduction for the PC’s and peripherals, and that the depreciation under MACRS for the year would be based on the depreciable base of $14K. Can someone please clarify/explain?

[wawr47aa87]

I remember doing this SIM and thinking the same thing about the PCs and peripheral equipment. But then I went back and read if they even elected 179. As you said “The SIM indicates no additional S.179 deduction for the PC's and peripherals…” Exactly. Section 179 is an election that the taxpayer CHOOSES. In this case, they just decided that they didn't want to expense it under 179. Why? Only God knows. So without a 179 deduction, The original cost of $14k would be the base for MACRS depreciation

BEC 76 (2/15)
REG 81 (4/15)
AUD 78 (5/15)
FAR 81 (7/15)

Roger + Ninja MCQ

[Author]

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