McKenzie purchased qualifying equipment for his business that cost $212,000 in 2019. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. Calculate McKenzie’s § 179 expense deduction for 2019 and any carryover to 2020. § 179 expense deduction for 2019: $ § 179 carryover to 2020: $ b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.5. § 179 expense deduction for 2019: $ § 179 carryover to 2020: $

Since 179 permits to elect to write off up to $500,000 of the cost of acquisition of tangibles to personal property during the first year. That amount cannot be capitalized and depreciated. Some hindrance of Section 179 which we have as: assuming the the value of assets increased by $2 million, in such situation excess of $2 million is removed from writing off the

amount. Another is if the amount can't be written off if more than the taxable income is lower than the written off amount and then it will be moved to the next year. McKenzie purchased assets for $212,000 and used section 179 deductions. It is required to compute McKenzie’s taxable income was $5,600 before the use of the 179 deductions. The Section 179 expense of $212,000 is less than $2 million, the entire $212,000 is eligible for the deduction. The deduction is limited to the taxable income of the current year which is $5,600.