Problem:
Robert is a sole proprietor who uses the calendar year as his tax year. On July 20, 2014 he acquired and placed in service a business machine, a 7-year asset, for $50,000. No other property was acquired in 2014.
Required:
Question 1: What is the amount of depreciation allowed in 2014 and 2015 if Sec.179 depreciation (first year expense election) was not elected?
Question 2: What is the amount of depreciation allowed in 2014 and 2015 if Sec.179 was elected?
Note: Explain all steps comprehensively.