Boxer Corporation buys equipment in January of the current year with a seven- year class life for $15,000. The corporation expensed the $15,000 under Sec. 179. The deduction in the year of purchase for E&P purposes due to the acquisition and expensing of the equipment is

Question

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For E&P purposes, the deduction is based on the MACRS depreciation method, not the Sec. 179 expense. For a 7-year property, the first-year MACRS depreciation is 20% of $15,000, which is $3,000.

Boxer Corporation Buys Equipment in January of the Current Year