Delmont Fire Co purchased identical equipment having an estimated useful life of ten years. Wind Chime uses the straight-line depreciation method and Fire Hut uses the double-declining-balance method of depreciation. Assuming the two entities are similar in all other respects, which of the following statements is correct?
a. Wind Chime's depreciation expense will be greater in the second year than Fire Hut's depreciation expense.
b. Fire Hut's book value will be greater than Wind Chime's book value at the end of year one.
c. Wind Chime's net income will be greater than Fire Hut's net income in year nine.
d. Fire Hut's book value will be less than Wind Chime's book value at the end of year two.
d
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Ilene owns an unincorporated manufacturing business. In 2018, she purchases and places in service $2,536,000 of qualifying five-year equipment for use in her business. Her taxable income from the business before any depreciation deduction is $900,000. Ilene will elect out of bonus depreciation but plans to take the maximum allowable deduction under Sec. 179. Which of the following statements is
true regarding the Sec. 179 election? A) Ilene can deduct $1,000,000 as a Sec. 179 deduction in 2018, with no carryover to next year. B) Ilene can deduct $964,000 as a Sec. 179 deduction in 2018, with no carryover to next year. C) IIene can deduct $900,000 as a Sec. 179 deduction in 2018; $64,000 may be carried over to next year. D) Ilene can deduct $900,000 as a Sec. 179 deduction in 2018, with no carryover to next year.