Sec. 179 Limitations and Carryovers. In 2021, Tish acquires and places into service inher business 7-year MACRS property costing $40,000 and 5-year MACRS property cost-ing $165,000. Tish elects Sec. 179 expensing for all of the properties' cost. Tish's taxableincome (before the Sec. 179 and 50% of self-employment tax deductions) is $160,000.a. What amount may Tish deduct under Sec. 179 for 2021 for the properties? Whatamount can she carry over to 2022?b. What is Tish's total 2021 depreciation deduction?c. What are the limitations on Tish's ability to use the Sec. 179 carryover in 2022?d. How would your answers to Parts a, b, and c change if Tish's 2021 business taxableincome (before the Sec. 179 expense and the 50% of self-employment tax deductions)was $300,000 instead of $160,000?

The explanation is shown below as,

Answered: 179 and 50% of self-employment ta Tish…

179 and 50% of self-employment ta Tish deduct under Sec. 179 for 20 over to 2022? D21 depreciation deduction? ons on Tish's ability to use the Sec.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Sec. 179 Limitations and Carryovers. In 2021, Tish acquires and places into service in
her business 7-year MACRS property costing $40,000 and 5-year MACRS property cost-
ing $165,000. Tish elects Sec. 179 expensing for all of the properties' cost. Tish's taxable
income (before the Sec. 179 and 50% of self-employment tax deductions) is $160,000.
a. What amount may Tish deduct under Sec. 179 for 2021 for the properties? What
amount can she carry over to 2022?
b. What is Tish's total 2021 depreciation deduction?
c. What are the limitations on Tish's ability to use the Sec. 179 carryover in 2022?
d. How would your answers to Parts a, b, and c change if Tish's 2021 business taxable
income (before the Sec. 179 expense and the 50% of self-employment tax deductions)
was $300,000 instead of $160,000?

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