[Anonymous]

Browne, a self-employed taxpayer, had 2015 business net income of $260,000 prior to any expense deduction for equipment purchases. In 2015, Browne purchased and placed into service, for business use, office machinery costing $120,000. This was Browne’s only 2015 capital expenditure. Browne’s business establishment was not in an economically distressed area. Browne made a proper and timely expense election to deduct the maximum amount. Browne was not a member of any pass-through entity. What is Browne’s deduction under the election?

A. $15,000

B. $25,000

C. $108,000

D.$120,000

According to the key, the answer is B $25000 ” Browne is allowed to expense up to $25,000 in 2015. Therefore, since Browne’s purchase cost $120,000, he can only deduct the $25,000.”

Wouldn’t the maximum allowable depreciation expense for the year be $38,576? $25000 under section 179 and the remainder under .1429 MACRS?