The only asset Bill purchased during 2017 was a new seven-year class asset. the

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

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