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 29,2017.The machinery was Elakin's only asset purchase during 2017,and Elakin's taxable income before any Section 179 deduction was $14 million.
a.Compute Elakin's 2017 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 would your answer to a.change if Elakin's taxable income before any Section 179 deduction was $281,400 instead of $14 million?