Tom has a successful business with $100,000 of taxable income before the election to expense in 2017. He purchases one new asset in 2017, a new machine which is 7-year MACRS property and costs $25,000. You are Tom's tax advisor. Complete the memorandum regarding the options you would advise for Tom and the treatment of this machine for tax purposes in 2017.

Memorandum

To: Tom Businessman From: Tax Advisor

One option is to utilize Section 179 which, by election, would allow you to expense $

of the cost of the machine in 2017. If the Section 179 election is not made and assuming no bonus depreciation is taken, you would be allowed a MACRS deduction of $.