Identify the correct statements.

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Chapter 9, Problem 4STQ

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Identify the correct statements.

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Ignore the impact of payroll taxes, self-employment taxes in your calculations, unless specifically identified as an element of the question. • In the year of purchase, a taxpayer may elect to claim a $1,000,000 Section 179 election on purchases of non-realty used in a business. Assume that this election applies only if a question expressly mentions that this election has been made. • A taxpayer may exclude $250,000 of gain per person upon the sale of a principal residence. Audrey owns and operates her own pizza delivery business. Audrey bought a small car on July 1, Year 1 for $25,000. She uses this car solely for business purposes. According to IRS tables, the depreciation factors applicable to this car are “Year 1: .20” and “Year 2: .32.” (Section 179 is not elected.) The fair market value of this car on January 1, Year 2 was $17,000. In Year 1, and again in Year 2, Audrey, a single taxpayer, has AGI of $40,000, no property transactions and $9,000 of itemized deductions…