On july 10, 2019, ariff places in service a new suv that cost $70,000 and weighed 6,300 pounds. the suv is used 100% for business. determine ariff's maximum deduction for 2019, assuming ariff's § 179 business income is $110,000. ariff does not take additional first-year depreciation.

$34,000

Explanation:

Because the SUV weighs over 6,000 pounds, it is not subject to the statutory dollar limits on luxury automobiles.

Under section 179 expensing (limited to $25,000 for SUVs)

= $25,000

Regular MACRS:

= [($70,000 - $25,000) × 0.20}]

= 9,000

Ariff's maximum deduction for 2019 would be:

= $25,000 + $9,000

= $34,000

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disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

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