The Basis of an Asset on Which $20,000 Has Been

question 40

True/False

The basis of an asset on which $20,000 has been expensed under § 179 will be reduced by $20,000 even if $20,000 cannot be expensed in the current year because of the taxable income limitation.

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Definitions:

Expected Economic Life

The anticipated period over which an asset is useful to the owning entity in generating revenue.

Expenses

Costs incurred in the process of earning revenue, typically categorized into operating expenses or non-operating expenses.

Writing Off

The process of recognizing that an asset has lost value or a debt is uncollectible and reflecting this in the accounting records.

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to a financial loss for the company.