Lori, who is single, purchased 5-year class property for $31,000 and 7-year class property for $42,000 on May 20, 2014. Lori expects the taxable income derived from her business (without regard to the amount expensed under Sec. 179) to be about $1000,000. Lori wants to elect immediate Sec. 179 expensing, but she doesn't know which asset she should expense under Sec. 179. Lori does not claim any available additional first-year depreciation.
a. Determine Lori's total deduction if the Sec. 179 expense is first taken with respect to the 5-year class asset.
b. Determine Lor's total deduction if the Sec. 179 expense is first taken with respect to the 7-year class asset.
c. What is your advice to Lori?