Reference no: EM133033639

Question - John and Mary are married. They own and operate J & M Restaurant as a family partnership. In 2020, they traded in an oven used in their business with an adjusted basis of $1,200 for a new one costing $3,800. They were given $700 trade-in for the old oven and paid $3,100 cash for the new oven on July 15, 2020. The new oven was placed in service in the restaurant on July 15, 2020. They also purchased a new computer system for use in their business for $8,700. Although the new computer system was installed, ready, and available for use on December 12, 2020, John and Mary decided to finish out the year using the old computer system. The new computer system was first used in their business on January 1, 2021. Taxable income from the restaurants business before the Sec. 179 deduction was $490,000. What amount of Sec. 179 deduction can John and Mary claim if they file a joint return for 2020 and neither has any other Sec. 179 deductions?

A. $12500

B. $3100

C. $11800

D. $3800