White Company acquires a new machine (seven-year property) on January 10, 2019, 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 2019 assuming White has taxable income of $800,000.
A)$88,598
B)$301,159
C)$568,574
D)$620,000

Question

Quizplus · Accepted Answer

The total deductions include the maximum § 179 expense deduction of $1,020,000 (for 2019, but limited to the cost of the machine, $620,000) and 100% bonus depreciation, which allows the entire cost of the machine to be deducted in the first year. Therefore, the total deduction is $620,000.

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