Everest Corp

Essay

Everest Corp.acquires a machine (seven-year property)on January 10,2017 at a cost of $2,042,000.Everest makes the election to expense the maximum amount under Sec.179.The property is not eligible for bonus depreciation.
a.Assume that the taxable income from trade or business is $1,500,000.
(1)What is the amount of the Sec.179 expensing deduction for the current year?
(2)What is the amount of the Sec.179 carryover to the next tax year?
(3)What is the amount of depreciation allowed?
b.Assume instead that the taxable income from trade or business is $400,000.
(1)What is the amount of the Sec.179 expensing deduction for the current year?
(2)What is the amount of the Sec.179 carryover to the next tax year?
(3)What is the amount of depreciation allowed this year?