Question

The Aaron Corp purchased a new computer system on June 11, 2017, for $680,000. What is the maximum deduction Aaron can take this year on this computer system?

Show your computations and discuss/explain the alternatives in how you arrive at your answer.

Answer 1

Expensing Your 2017 Computer Purchase

Prior to deteriorating your PC, consider expensing it. Internal Revenue Code, section 179, enables you to cost instead of deteriorate the expense of your qualifying PC. When you cost a thing instead of devalue it, you are deducting the full price tag or rent cost in the year the PC was put into administration. For PCs bought in 2017, these are the capability prerequisites for the 179 finding:

You can cost the PC just for the year it was purchased or rented. You can take the derivation on your 2017 PC just on your 2017 expense form, however you can take it regardless of whether you are documenting the 2017 return later than the next year.

New PCs as it were.

The PC buy should be inside current year expensing limits. Be that as it may, not to stress – the farthest point for the duty year 2017 is $510,100.

The PC must be utilized 51 percent of the time or more for business to qualify.

Deductible sum for PCs utilized under 100 percent of the ideal opportunity for business breaks even with the expense of PC times the rate utilized. In the given case, Maximum deduction will be $510,100 as purchase price is $680,000 i.e more than maximum deduction allowable.