Norwell Company purchased $1,413,200 of new business equipment on July 10, 2020. This was Norwell's only asset purchase for its 2020 taxable year. Compute Norwell's total tax depreciation deduction for this 7-year recovery property (assuming Norwell has sufficnet income for the Section 179 deduction).

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The total tax depreciation deduction for Norwell's 7-year recovery property can be $1,413,200 if Norwell elects to take the Section 179 deduction, which allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year up to a certain limit, which for 2020 was $1,040,000. Since the purchase price of $1,413,200 exceeds the Section 179 limit, Norwell can also apply bonus depreciation (100% for 2020) to the remaining amount after the Section 179 deduction, effectively allowing a full deduction of the purchase price in the year of acquisition.

Norwell Company Purchased $1,413,200 of New Business Equipment on July