Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $400,000 on May 20, 2015. Lori expects the taxable income derived from her business (without regard to the amount expensed under 179) to be about $800,000. Lori wants to elect immediate 179 expensing, but she doesn?t know which asset she should expense under 179. She does not claim any available additional first-year depreciation.

Note: Assume the 2014 179 amount is extended to 2015.

Click here to access Exhibit 8.1 and Exhibit 8.4 of the textbook.

B. Determine Lori's total deduction if the 179 expense is first taken with respect to the 5-year class asset

Immediate expense deduction under 179_________________

Copier

Regular MACRS $_____________________________________

Furniture

Regular MACRS $______________________________________

Total deduction $______________________________

B. Determine Lori's total deduction if the 179 expense is first taken with respect to the 7-year class asset.

Copier

Regular MACRS $_____________________________________

Furniture

Regular MACRS $______________________________________

Total deduction $______________________________

C. If 179 expense is first allocated to the seven-year class property, the deduction for the year would be $_________ larger