Section 179 Addback Example 1 - Sole Proprietor


Mack is the sole proprietor of a trucking company who purchased a new dump truck he placed in service in 2019 and used for his business.

On his federal return, Mack elects to expense $100,000, which is the entire cost of the new truck. He has business income of $80,000. His federal section 179 expense deduction is limited based on the cost of the asset in comparison to his business income. Since he is limited to expensing $80,000 (his business income), Mack will have a carryover of $20,000 ($100,000 – $80,000 = $20,000) on his federal return.


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