Exercise $5-7($Algorithmic$)($LO$.7)$

In $2023,$ McKenzie purchased and placed into service qualifying equipment $(7-$year MACRS class$)$ for his business that cost $$420,800.$ The

taxable income of the business for the year is $$28,200$ before consideration of any $179$ deduction.

If an amount is zero, enter $"0".$

a$.$ Calculate McKenzie's $179$ expense deduction for $2023$ and any carryover to $2024.$

$179$ expense deduction for $2023$: $

$179$ carryover to $2024$: $$

b$.$ How would your answer change if McKenzie decided to use additional first$-$year $($bonus$)$ depreciation on the equipment instead of using

$179$ expensing? Hint: See Concept Summary $8\mathrm{.}3.$

Additional first$-$year depreciation for $2023$: $

MACRS cost recovery for $2023$: $

Total cost recovery for $2023$: $