question archive Olga is the proprietor of a small business
Olga is the proprietor of a small business
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Olga is the proprietor of a small business. In 2020 the business's income, before consideration of any cost recovery or 179 deduction is 250,000. Olga spends 620,000 on new 7 year class assets and elects to take the 179 deduction on them. She does not claim any available additional first year deprecation. Olgas cost recovery deduction for 2020, except for the cost recovery with respect to the new 7 year assets is 95,000. Determine Olgas total cost recovery for 2020 with respect to the 7 year class assets and the amount of any section 179 carry foward.
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Section 179 deduction before any income limit would be $620,000
Therefore, the total amount of Olga's 179 deduction for the 7 year asset after any income limitation
= Lower of (250000 - 95000) or
$620,000
=$155,000
Ogla's total cost recovery depreciation deduction(including 179) is =$250,000
Amount of any section 179 carryforward (620,000 - 155,000) =$465,000
Step-by-step explanation
Amount of any section 179 carryforward would be Sec. 179 deduction before any income limit minus total amount of Sec.179 deduction for 7 year asset after any income limitation
