In August 2014,Tianshu Acquires and Places into Service 7-Year Business

question 90

Essay

In August 2014,Tianshu acquires and places into service 7-year business equipment (tangible personal property qualifying under Sec.179)for $70,000.This is the only asset that she purchased during the year; her taxable income from her trade or business is $23,000.She decides to limit her 179 election to the maximum amount currently deductible in her business for the current year.What is her maximum cost recovery (Sec.179 and depreciation)deduction for 2014?

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Definitions:

Cash Discounts

Reductions in price offered to customers for prompt payment of their bills.

Interest Days

The number of days over which interest is calculated, often used in the context of loans or investments.

Consumer Loans

Loans given to individuals by financial institutions for personal, family, or household purposes such as buying a car or home improvement.

Actual Interest Rate

The true rate of interest earned or paid on an investment, loan, or other financial product over a specific time period.