Coralbay, a calendar-year corporation, purchased used office furniture for $240,000 and new machines for $1,880,000 in July 2017. What is Coralbay's maximum cost recovery deduction for 2017?

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Sec. 179 expensing is limited to $420,000 [$510,000 - ($2,120,000 - $2,030,000)] and can be applied to either asset; but bonus depreciation can only be applied to the new machines. Office furniture: $240,000 Sec. 179 applied to the office furniture leaves $180,000 for the machines. Machines: [.5 x ($1,880,000 - $180,000) = $850,000 bonus depreciation; $850,000 x .1429 = $121,465 MACRS depreciation. Total depreciation = $240,000 + $180,000 + $850,000 + $121,465 = $1,391,465.

Coralbay, a Calendar-Year Corporation, Purchased Used Office Furniture for $240,000