LO5 In 2010, Theo purchases $16,000 of Section 179 property for use in his delivery business. During

Question:

LO5 In 2010, Theo purchases $16,000 of Section 179 property for use in his delivery business. During 2010, he has $12,000 in taxable income from his business.

a. What is Theo’s maximum Section 179 deduction in 2010? Explain.

b. Theo’s business taxable income for 2011 is $5,000. He purchases $1,000 of new Section 179 property in 2011. What is Theo’s maximum Section 179 deduction for 2011?

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