The Basis of an Asset on Which $500,000 Has Been

question 150

True/False

The basis of an asset on which $500,000 has been expensed under § 179 will be reduced by $500,000,even if $500,000 cannot be expensed in the current year because of the taxable income limitation.

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Definitions:

Accounting Depreciation

The systematic allocation of the cost of a tangible asset over its useful life for financial reporting purposes.

Replacement Cost

Cost to replace a firm’s assets. Also called reproduction cost.

Economic Income

The sum of a company's net cash flow and the change in present value of a company's cash flows in a given period.

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets.