White Company acquires a new machine (seven-year property) on January 10, 2018, at a cost of $620,000. White makes the election to expense the maximum amount under § 179, and wants to take any additional first-year depreciation allowed. No election is made to use the straight-line method. Determine the total deductions in calculating taxable income related to the machine for 2018 assuming White has taxable income of $800,000.
A) $88,598
B) $301,159
C) $568,574
D) $620,000
E) None of the above

Question

Quizplus · Accepted Answer

The maximum § 179 expense deduction for 2018 is $1,000,000, which covers the entire cost of the machine ($620,000). Therefore, White Company can expense the full cost of the machine under § 179, resulting in a total deduction of $620,000 for 2018.

White Company Acquires a New Machine (Seven-Year Property) on January