Eduardo Is a Single Taxpayer with a Farming Operation That

question 80

Essay

Eduardo is a single taxpayer with a farming operation that suffered a net loss of $30,000 in 2016.In addition,he earned $50,000 from his accounting firm.Eduardo purchased $50,000 of equipment for his farm.He wants to maximize his cost recovery deduction and believes the Section 179 election will help achieve that goal.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 2017 will be $60,000,and he plans to add about $20,000 of equipment to the farm operation.

---

Definitions:

Implied-in-Fact Contract

An agreement created by the actions or circumstances of the parties involved rather than by written or spoken words.

Gambling Illegal

The prohibition by law of the practice or act of wagering, betting, or playing games of chance for money or other stakes.

Exculpatory Clause

A contract provision that releases one party from liability or legal consequences of their actions to another party involved.

Release

In legal terms, an agreement where one party frees another from liability, claims, or demands.