Brett started a new construction business in April 2016. In connection with the new business, he purchased a new backhoe for $60,000 in June 2016. The new business is struggling and expecting to show a loss for 2016. Brett is considering expensing the $60,000 cost of the backhoe under §179 on the 2016 tax return. Brett has been awarded a large project for 2017, and expects to show a substantial profit for the year ending 12/31/2017.
Your response must fully address the following:
1. Evaluate the appropriateness of Brett’s plan.
2. Explain your position.
3. How do changes in tax law affect the appropriateness of Brett's plan?