Dain’s Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any §179 expense

(assume no bonus depreciation).

LO 10-3 LO 10-2 planning Asset Purchase Date Original Basis Drill bits (5-year) January 25 $ 90,000 Drill bits (5-year) July 25 95,000 Commercial building April 22 220,000

a) What is the maximum amount of §179 expense Dain may deduct for the year?

b) What is Dain’s maximum depreciation expense for the year (including

§179 expense)?

c) If the January drill bits’ original basis was $2,375,000, what is the maximum amount of §179 expense Dain may deduct for the year?

d) If the January drill bits’ basis was $2,495,000, what is the maximum amount of §179 expense Dain may deduct for the year?