Elakin Inc

Essay

Elakin Inc.,a calendar year taxpayer,paid $1,339,000 for new machinery (seven-year recovery property)placed in service on August 29,2019.The machinery was Elakin's only asset purchase during 2019,and Elakin's taxable income before any Section 179 deduction was $14 million.
a.Compute Elakin's 2019 cost recovery deduction with respect to the machinery.
b.How would your answer change if the cost of the machinery was $2,150,000 instead of $1,339,000?
c.How much Section 179 expense would be taken in part a if Elakin's taxable income before any Section 179 deduction was $281,400 instead of $14 million?