Lori, who is single, purchased 5-year class property (copier) for $200,000 and 7

Question

Lori, who is single, purchased 5-year class property (copier) for $200,000 and 7-year class property (furniture) for $400,000 on May 20, 2015. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate § 179 expensing, but she doesn't know which asset she should expense under § 179. Lori does not claim any available additional first-year depreciation.

Determine Lori's total deduction if the § 179 expense is first taken with respect to the 5-year and 7-year class asset?

Explanation / Answer

lori s total asset

($200000+$400000)=$600000

her business income $800000

her total deduction is $600000

because under 179 there deduction never cross the trade income

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