Problem $8-15$

Modified Accelerated Cost Recovery System $($MACRS$)$ and Bonus Depreciation, Election to Expense $($Section $179)($LO $8\mathrm{.}2,8\mathrm{.}3)$

Tom has a successful business with $$100,000$ of taxable income before the election to expense in $2023.$ He purchases one new asset in $2023,$ a new machine which is seven$-$year MACRS property and costs $$25,000.$

You are Tom's tax advisor. Complete the memorandum regarding the options you would advise for Tom and the treatment of this machine for tax purposes in $2023.$

Click here to access the depreciation table.

If required, round your final answers to the nearest dollar.

$\backslash$table$[[$Memorandum$],[$To: Tom Businessman$],[$From: Tax Advisor$],[$One option is to utilize Section $179$ which, by election, would allow you to expense $