Lori, who is single, purchased five-year class property for $200,000 and seven-year class property for $400,000 on May 20, 2013. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate § 179 expensing, but she doesn't know which asset she should expense under § 179. She elects not to take additional first-year depreciation.
a. Determine Lori's total deduction if the § 179 expense is first taken with respect to the five-year class asset.
b. Determine Lori's total deduction if the § 179 expense is first taken with respect to the seven-year class asset.
c. What is your advice to Lori?