In August of 2013, David acquires and places into service business equipment costing $550,000. The equipment is classified as 5 year recovery…

In August of 2013, David acquires and places into service business equipment costing $550,000. The equipment is classified as 5 year recovery property. No other acquisition are made during the year. The property is not eligible for bonus depreciation. David elects to expense the maximum amount under sec. 179. David’s total deductions for the year( including sec. 179 and depreciation) are

Answer: 

Explanation:

section 179 immediate expensing

MACRS depreciation:

  basis for depreciation:

($550,000 cost – $500,00 sec. 179) x

total depreciation