Boxer Corporation buys equipment in January of the current year with a seven-year class life for $15,000. The corporation expensed the $15,000 under Sec. 179. The deduction in the year of purchase for E&P purposes due to the acquisition and expensing of the equipment is
A) $1,500.
B) $3,000.
C) $14,000.
D) $15,000.
B) $3,000.
Property expensed under Sec. 179 is expensed ratably using the straight-line method over five years, commencing with the month in which it is deductible for Sec. 179 purposes when computing E&P regardless of the number of years in its class life.
$15,000/5 yrs. = $3,000
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