Pyle Inc., a calendar year taxpayer, generated over $10 million taxable income in 2008. Pyle made one asset purchase: transportation equipment costing $177,150. The equipment has a 5-year recovery period and was placed in service on February 9.
Assuming that Pyle made the Section 179 election with respect to the equipment, compute Pyle's first-year cost recovery deduction.
D. None of the above
The answer is calculated assuming you are using 2007 Section 179 limits:
MACRS % at 20% for year 1; 32% for year 2, ...
The solution provides the limits in the years 2007 and 2006 and shows all the calculations to arrive at an answer.