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Dains Diamond Bit Drilling purchased the following assets this year. Purchase Original Asset Date Basis Drill bits (5-year) January 25 $ 90,000 Drill bits (5-year)

Dains Diamond Bit Drilling purchased the following assets this year.

Purchase Original
Asset Date Basis
Drill bits (5-year) January 25 $ 90,000
Drill bits (5-year) July 25 95,000
Commercial building April 22 220,000

Assume its taxable income for the year was $53,000 for purposes of computing the 179 expense (assume no bonus depreciation).

If the January drill bits original basis was $3,875,000, what is the maximum amount of 179 expense Dain may deduct for the year?

If the January drill bits original basis was $2,875,000, what is the maximum amount of 179 expense Dain may deduct for the year?

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