Robert is a sole proprietor who uses the calendar year as his tax year. On July 20,

Question:

Robert is a sole proprietor who uses the calendar year as his tax year. On July 20, 2017 he acquired and placed in service a business machine, a 7-year asset, for $50,000. No other property was acquired in 2017. Robert elects out of bonus depreciation.

a. What is the amount of depreciation allowed in 2017 and 2018 if Sec. 179 depreciation (first-year expense election) was not elected?

b. What is the amount of depreciation allowed in 2017 and 2018 if Sec. 179 was elected?