Eduardo Is a Single Taxpayer with a Farming Operation That

question 29

Essay

Eduardo is a single taxpayer with a farming operation that suffered a net loss of $30,000 in 2013.In addition,he earned $50,000 from his accounting firm.Eduardo purchased $150,000 of equipment for his farm.He wants to maximize his cost recovery deduction and believes the Section 179 election will help achieve that goal.However,he will elect out of bonus depreciation.What is the amount of the maximum Section 179 deduction Eduardo can use? Explain the optimum approach to attain his goal.Assume Eduardo's total taxable business income in 2014 will be $60,000,and he plans to add about $20,000 of equipment to the farm operation.

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Definitions:

Power Of Population

Refers to the impact that a population size and growth rate can have on resources and environmental conditions.

Subsistence For Man

The minimum means necessary for an individual to maintain their life, including food, shelter, and clothing.

Taller Workers

Refers to employees who are physically taller; this term might be used in contexts discussing physical job requirements or biases related to height in the workplace.

Income

The financial gain obtained by an individual or entity, usually derived from work, capital, or land, which is used for consumption or investment.