Brite Lites (BL) is a proprietorship. In 2017, BL acquired the following new capital assets: Feb. 28 Shelving $20,000 10-year property Apr. 7 Office furniture 25,000 7-year property June 13 Packing equipment 18,000 5-year property July 9 Testing equipment 32,000 5-year property Nov. 1 Manufacturing equipment 650,000 10-year property

In 2017, BL took full advantage of Sec 179 and bonus depreciation (50% rate). In January 2018, BL bought an office building for $1,000,000. After two months of renovations, BLs office staff moved into the third floor, the retail operations moved into the second floor, and the manufacturing operations into the main floor.

Sales increased significantly after moving to the new building. Because of that, on July 23, BL purchased better packing equipment for $69,000. The equipment has a seven-year recovery period. On October 1, 2018, BL sold the packing equipment (acquired in 2017) for $17,000.

The building and packing equipment were the only capital assets acquired in 2018. For 2018, BL did not make any elections with respect to Sec. 179 or bonus depreciation.

Required:

1. Calculate BLs total tax depreciation for 2018.
2. Calculate the gain/loss on the sale of the packing machine.
3. Jay Brite is the sole proprietor of BL. He has an office in the new building, but he also has a home office that he uses in the evenings and weekends to do his administrative work. He spends so much time in his home office that he believes he should be able to deduct home office expenses. If he cannot do so, can Brite Lites reimburse him for his expenses? Respond to Jay about his home office expenses.