T or F The 179 deduction can exceed 1,020,000 in 2019 if the taxpayer has a 179 amount that exceeded the taxable income limitation in the prior year 2: Alicia was involved in an automobile accident in 2019. Her car was used 60% for business and 40% for personal use. The car had originally cost $40,000. At the time of the accident, the car was worth $20,000 and Alicia had taken $8,000 of depreciation. The car was totally destroyed and Alicia had let her car insurance expire. If Alicia’s AGI is $50,000 (before considering the loss), determine her itemized deduction for the casualty loss. a: $34,000; $0 b: $50,000; $0 c: $34,000; $4,500 d: $26,000; $5,700 e: none of these

1. False

2.  c: $34,000; $4,500

Explanation:

1. The given statement is false

As for the 179 deduction, the maximum amount allowed is $1,000,000 and it cannot be greater than this in any of the case

2. Particulars          Business     Personal

Cost                         $24,000      $16,000

                      ($40,000 × 60%)   ($40,000 × 40%)

Less: depreciation   -$8,000        $0

Basis                       $16,000         $16,000

Fair market value   $12,000         $8,000

Loss:                       $16,000           $8,000

AGI before loss                              $50,000

Less: Business loss                        -$16,000

AGI                                                    $34,000

Personal casuality loss                    $8,000

Less: $100 floor                                -$100

ANd 10% of AGI                                 -$3400

Deduction itemized                          $4,500

Hence, the correct option is c.

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