The only asset Bill purchased during 2017 was a new seven-year class asset. the
ID: 2786163 • Letter: T
Question
The only asset Bill purchased during 2017 was a new seven-year class asset. the asset, which was listed property, was acquired on June 17 at cost of $50,000. The asset was used 40% for business, 30% for the production of income, and the rest of the time for personal use. Bill always elects to expense the maximum amount under &179 whenever it is applicable. The net income from the business before the &179 deduction is $100,000. Determine Bill's maximum deduction with respect to the property for 2017.
A. $1,428
B. $2,499
C. $26,749
D. $33,375
E. None of the above
Explanation / Answer
The listed property does not pass the predominantly business usage test.
We cannot take 179 expensing or additional first-year depreciation (if available). In addition, only straight- line cost recovery can be used.
Maximum deduction = (50,000 * .0714 * 70%)
Maximum deduction = 2,499