Tax Accounting Question: Gillian, a married woman, is a sole proprietor who runs

Question

Tax Accounting Question:

Gillian, a married woman, is a sole proprietor who runs a landscaping business. Her net earnings from self-employment for 2013 were $85,000. Her husband’s nursing wages were $35,000. In March of 2013, she purchased a backhoe for a cost of $155,000. The total of all personal property she placed in service during the year was $250,000. What is Gillian’s maximum Code Sec. 179 expense deduction in 2013? Assume she does not elect Code Sec. 179 expense with respect to any of the other assets placed in service.

Explanation / Answer

Land and Land improvements like landscaping business do not qualify for sec 179 deduction. Therefore Gillian cannot claim any deduction for the backhoe investment in 2013.

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