Tom purchases a new manufacturing machinefor his business on April 1, 2015 for $27,000.The machine is depreciated
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Tom purchases a new manufacturing machinefor his business on April 1, 2015 for $27,000.The machine is depreciated under MACRS with a 7-year recovery period. This maachine was his only asset acquisitionof this year.Thomas elects to expense$25,000 of the cost under Section 179.a. What is Tom's totaldeprciation deduction for the machine in 2015.b. Tom decides to sell his machine on October 5, 2017 for $10,000.Compute Tom's depreciation deduction for 2015 through 2017.The adjusted basis of the machine on October 5, 2017, and the gain or loss on the sale.(HINT: 2017 is only 1/2 year).
Refer to the table on the right to calculate the MACRS depreciation
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