Which of the following conditions must be satisfied for a
taxpayer to expense, in the year of purchase, under Internal Revenue
Code Section 179, the cost of new or used tangible depreciable
personal property?

I. The property must be purchased for use in the taxpayer’s
active trade or business.

II. The property must be purchased from an unrelated party.

(c) The requirement is to determine which conditions
must be satisfied to enable a taxpayer to expense the cost of new
or used tangible depreciable personal property under Sec. 179.
Taxpayers may elect to expense up to $139,000 (for 2012) of the
cost of new or used tangible depreciable personal property placed
in service during the taxable year. To qualify, the property must
be acquired by purchase from an unrelated party for use in the
taxpayer’s active trade or business. The maximum cost that can
be expensed of $139,000 is reduced dollar-for-dollar by the cost
of qualifying property that is placed in service during the year that
exceeds $560,000. Additionally, the amount that can be expensed
is further limited to the aggregate taxable income derived
from the active conduct of any trade or business of the taxpayer.