Company XYZ, with a taxable income of $50,000 and $60,000 in eligible Section 179 property, can claim what deduction?

In this scenario, Company XYZ can claim a deduction under Section 179 for the amount of its eligible Section 179 property, up to its taxable income limit. The Section 179 deduction allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year.

However, there is a crucial limitation: the total Section 179 deduction cannot exceed the business's taxable income. Since Company XYZ has a taxable income of $50,000, that becomes its deductible limit for the year under Section 179.

Despite having $60,000 in eligible property, the company can only deduct up to its taxable income of $50,000. Therefore, while it could potentially deduct more if the taxable income were higher, it can only claim a deduction of $50,000, which is the full amount of its taxable income. As a result, this amount reflects the maximum deduction it is allowed.

The choice indicating a deduction of $10,000 does not take the full taxable income into account; likewise, claiming $0 would ignore the eligible amount of property. The option for $60,000 is not feasible since it exceeds the company's taxable income limit. Thus, the $50,000 aligns with the business’s taxable income,