In January of the current year, your company purchased a sport utility vehicle (SUV) weighing 6,100 pounds in the amount of $130,000 for business-use only. At December 31st, you (the business owner) provide all the necessary information and documentation to your tax advisor to discuss tax options, more specifically depreciation. Your goal is to minimize the business's tax liability. After preparing financial statements, business income for the year was $85,000. Your accountant presents you with two options for depreciating the vehicle: MACRS (modified accelerated cost recovery system) or Section 179 deduction.

Original Post Directions:

Answer the following discussion questions:

2. What is the difference between MACRS (modified accelerated cost recovery system) and Section 179 deduction?
4. Utilizing the IRS rules and guidelines, what is the best course of action for your business given the two depreciation options (MACRS or Section 179 deduction)?
6. Explain the advantages and disadvantages of your selected depreciation option.