Election to Expense Assets (LO. 5) Brad is a shareholder and full-time employee of an s corporation. During 2020, he earns a $50,140 salary from the S corporation and is allocated $11,570 as his share of its net operating loss. In addition, Brad owns a limited partnership interest from which he earns $11,570 during 2020. Kanika, Brad's wife, operates a small business as a sole proprietorship. During 2020, she spends $70,300 on equipment for use in her business, which has a taxable income of $16,520 before the Section 179 deduction. a. Assuming that Brad and Kanika elect to expense the maximum amount under Section 179, what is the allowable deduction for 2020? Their maximum Section 179 deduction for 2020 is $ 70,300 but will be limited to s 66,660 X. Feedback Check My Work Section 179 - Under this provision, taxpayers are allowed to expense up to $1,040,000 (2020) of the cost of tangible personal property used in a trade or business. Amounts expensed under this provision reduce the depreciable basis of the property. The amount of the annual deduction limit is reduced when purchases of qualifying property exceed $2,590,000 in 2020. In addition, the deductible amount cannot exceed the taxable income from the active conduct of all the taxpayer's trade or business activities. b. Brad is allocated $12,000 in Section 179 expense from the corporation for 2021 and Kanika spends an additional $14,470 on equipment for use in her business. And, their taxable active business income is $35,000 for 2021. Assuming the taxpayer elects to expense the maximum amount under Section 179, what is the allowable deduction for 2021 and, if applicable, any carryforward. Complete the table below outlining their deduction. 179 Election carryforward from 2020 179 Election from S corporation x Equipment purchased Total Section 179 elected s Maximum section 179 expense deduction X