Comprehensive Tax Return Problem: The Snap-It-Open Corporation incorporated and began operations on Jan. 15, 2017. It elects to file its initial tax return as a calendar-year corporation and uses the accrual method of accounting. It elects the FIFO method of inventory valuation. Jason Sprull and Martin Winsock formed the business. They each contributed $250,000 cash for 50 percent of the 100,000 shares of $1 par value stock issued and outstanding.

On January 16 of the clients tax year, Snap-It-Open Corporation purchased two new machines and two used machines. The company considers the purchases as significant investments. As a result, the CFO of Snap-It-Open Corporation is interested in knowing how the company can maximize its capital allowance or allowable depreciation deduction before preparing the years tax returns. In a one-page memo, reply to the CFO of Snap-It-Open Corporation and advise the company on how they can maximize their capital allowance and/or allowable depreciation deduction.