Exercise $8-24($LO$.3)$

McKenzie placed in service qualifying equipment $(7-$year MACRS class$)$ for his business that cost $$212,000$ in $2023.$ The taxable income of the business for the year is $$5,600$ 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 $2023$: $fill in the blank $1$

$5,600$

$179$ carryover to $2024$: $fill in the blank $2$

$206,400$

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 $2023$: $fill in the blank $3$

$169,600$

MACRS cost recovery for $2023$: $fill in the blank $4$

$5,600$

Total cost recovery for $2023$: $fill in the blank $5$

$0$

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Section $179($Election to Expense Certain Depreciable Business Assets$)$ permits the taxpayer to elect to write off a certain amount of the acquisition cost of tangible personal property used in a trade or business.