Dave has operated a service business (company A) as a sole proprietor for many years. The business (company A) placed $700,000 of real property improvements into service which are eligible for immediate expensing under 179 (but not eligible for bonus depreciation).

Dave formed another company (company B) with a friend for which he has 90% capital and profit interest in. Company B purchased and placed into service $2,900,000 of 179 eligible property in the current year that is not eligible for bonus depreciation.

Dave has taxable income of $800,000 from company A and ordinary income of $750,000 from his 90% ownership share of company B.

How much can Dave elect to deduct under 179? Also, how will remaining expenditures be treated?