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 but assume that the 2013 §179 limits are extended to 2014).
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 the maximum amount of §179 expense Dain may deduct for the year?
d) If the January drill bits' basis was $2,495,000, what the maximum amount of §179 expense Dain may deduct for the year?