Loni Company paid $527,000 for tangible personality in 2013 and elected to expense $500,000 of the cost (the limited dollar amount for 2013). Loni’s taxable income before a Section 179 deduction was $394,100. Loni paid $23,700 for tangible personality in 2014 and elected to expense the entire cost. Loni’s taxable income before a Section 179 deduction was $228,000.
a. Compute Loni’s Section 179 deduction and taxable income for 2013.
b. Compute Loni’s Section 179 deduction and taxable income for 2014.