In 2011, Terrell, Inc., purchases machinery costing $2,018,000. Its 2011 taxable income before considering the Section 179

Question:

In 2011, Terrell, Inc., purchases machinery costing $2,018,000. Its 2011 taxable income before considering the Section 179 deduction is $490,000. Assume that Terrell elects not to claim bonus depreciation.
a. What is Terrell's maximum Section 179 deduction in 2011? Explain.
b. What is the depreciable basis of the equipment?