In 2019 you purchased for $2,000,000 a brand new widget making machine for your sole proprietorship widget making business. You were eligible to elect up to $1,020,000 as § 179 “expensing” . . . but you very deliberately chose not to… So is your basis in the machine for MACRS depreciation purposes $2,000,000? Or is it only $980,000? Why?

Income Tax Fundamentals 2020
38th Edition
ISBN:9780357391129
Author:WHITTENBURG
Publisher:WHITTENBURG
Chapter8: Depreciation And Sale Of Business Property
Section: Chapter Questions
Problem 15MCQ
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In 2019 you purchased for $2,000,000 a brand new widget making machine for your sole proprietorship widget making business. You were eligible to elect up to $1,020,000 as § 179 “expensing” . . . but you very deliberately chose not to…

So is your basis in the machine for MACRS depreciation purposes $2,000,000? Or is it only $980,000? Why?

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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