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Pam and Joe each own 50% of Tucson LLC a limited liability company located in Tucson, AZ which was created in April of 2019. Tucson LLC provides veterinary services and uses the cash method of accounting. Pam and Joe have come to you on December 30, 2019 to ask your advice on some transactions they are considering.

Tucson's financial information is provided below:

Profit and Loss Statement January 1, 2019-December 30, 2019:

Gross Receipts:
Veterinary Services	$675,000
Expenses:
Salaries	$400,000
Utilities	$17,000
Depreciation	$15,000
Supplies	$75,000
Interest	$20,000
Total Expenses	$557,000
Net Income	$148,000

Balance Sheet 12/30/2019

Assets:
Cash	$ 8,500
Equipment	$50,000
A/D Equipment	(21,500)
Building	$250,000
A/D Building	(100,000)
Total Assets	$187,000
Liabilities & Equity:
Mortgage Building	$25,000
Member Capital Avery	$81,000
Member Capital Henry	$81,000
Total Liabilities & Equity	$187,000

Please provide Tucson LLC advice on the following transaction:

1. They would like to purchase additional equipment for their business, they have not purchased any other fixed assets in 2019.

	Asset	Cost
	Examination Table	$15,000
	X-Ray Machine	$250,000

(a). Calculate the tax depreciation assuming these assets are purchased and placed in service on 12/31/2019 assuming that they have elected not to take Section 179 expense and bonus depreciation on these assets. (b). Calculate tax depreciation assuming these assets are purchased on 12/31/2019 assuming that they have not made any elections out of 179 or bonus depreciation. In each calculation assume Tucson LLC would like to take the maximum allowable deduction.

NOTE: : While both assets would normally be considered 5 year assets and thus eligible for only 5% depreciation assuming a mid-quarter convention, bonus depreciation on these assets would be allowable make them fully deductible in the year of acquisition