I think that you did correctly. it applys the reduce dollar by dollar rule.

As Puckhead23 posted, the question should state the year.

puckhead23 wrote: The Wiley book uses $250K / $800K limits (which is the 2010 amounts), although there was an increase in 2011 to $500K / $2MM.  I would hope an exam question would be specific as to which calendar year a Section 179 deduction is being taken.

I'm confused. Wiley says for 2010 tax calculation you can deduct a max of $250k if the total added assets are below $800k?

I thought the $250k/800K limits were for taxable years beginning after 2007 and before 2010 and the $500k/$2000K limits were for taxable years beginning in 2010 and 2011.

Source:

Quote: 179(b)(1)Dollar limitation.— The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed— 179(b)(1)(A)  $250,000 in the case of taxable years beginning after 2007 and before 2010, 179(b)(1)(B)  $500,000 in the case of taxable years beginning in 2010 or 2011, 179(b)(1)(C)  $125,000 in the case of taxable years beginning in 2012, and 179(b)(1)(D)  $25,000 in the case of taxable years beginning after 2012.   179(b)(2)Reduction in limitation.— The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds— 179(b)(2)(A)  $800,000 in the case of taxable years beginning after 2007 and before 2010, 179(b)(2)(B)  $2,000,000 in the case of taxable years beginning in 2010 or 2011, 179(b)(2)(C)  $500,000 in the case of taxable years beginning in 2012, and 179(b)(2)(D)  $200,000 in the case of taxable years beginning after 2012.