Davis, Inc., a motorcycle wheel manufacturer, purchased a new spoke machine in 2019 for $200,000. What are the tax effects of this purchase?
I.
If taxable income is $100,000, then $100,000 can be expensed in 2019.
II.
No Section 179 election is allowed if Davis decides to use a $200,000 depreciable basis.
III.
If Davis had purchased a total of $4,400,000 of equipment in 2019, the corporation can deduct none of the purchases in 2019 through the use of the Section 179 election.
?
A. Only statement I is correct.
B. Statements I and II are correct.
C. Statements II and III are correct.
D. Statements I and III are correct.
E. Statements I, II, and III are correct.
Answer: E
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