Szabi Inc., a calendar year taxpayer, purchased two assets during 2012: a machine costing $80,000 and computer equipment costing $103,500. The machine is 7-year recovery property and the computer equipment is 5-year recovery property. Which of the following statements is true?
A) Szabi should elect to expense the $80,000 cost of the machine and $59,000 of the cost of the computer equipment.
B) Szabi should elect to expense the $103,500 cost of the computer equipment machine and $35,500 of the cost of the machine.
C) Szabi must elect to expense $69,500 of the cost of the machine and $69,500 of the cost of the computer equipment.
D) Szabi is indifferent as to which costs to expense.
Correct Answer:
Verified
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