Davis, Inc., a motorcycle wheel manufacturer, purchased a new spoke machine in 2018 for $200,000. What are the tax effects of this purchase?
I.If taxable income is $100,000, then $100,000 can be expensed in 2018.
II.No Section 179 election is allowed if Davis decides to use a $200,000 depreciable basis.
III.If Davis had purchased a total of $4,400,000 of equipment in 2018, the corporation can deduct none of the purchases in 2018 through use of the Section 179 election.

Question

Davis, Inc., a motorcycle wheel manufacturer, purchased a new spoke machine in 2018 for $200,000. What are the tax effects of this purchase?
I.If taxable income is $100,000, then $100,000 can be expensed in 2018.
II.No Section 179 election is allowed if Davis decides to use a $200,000 depreciable basis.
III.If Davis had purchased a total of $4,400,000 of equipment in 2018, the corporation can deduct none of the purchases in 2018 through use of the Section 179 election.
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Quizplus · Accepted Answer

The Answer of Davis, Inc., a motorcycle wheel manufacturer, purchased a new spoke machine in 2018 for $200,000. What are the tax effects of this purchase?
I.If taxable income is $100,000, then $100,000 can be expensed in 2018.
II.No Section 179 election is allowed if Davis decides to use a $200,000 depreciable basis.
III.If Davis had purchased a total of $4,400,000 of equipment in 2018, the corporation can deduct none of the purchases in 2018 through use of the Section 179 election.
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