Terra Corporation,a Calendar-Year Taxpayer,purchases and Places into Service Machinery with a 7-Year

question 74

Multiple Choice

Terra Corporation,a calendar-year taxpayer,purchases and places into service machinery with a 7-year life that cost $640,000.Neither the mid-quarter convention,nor bonus depreciation apply.Terra elects to depreciate the maximum under Sec.179.Terra's taxable income for the year before the Sec.179 deduction is $700,000.What is Terra's total depreciation deduction related to this property (rounded to the nearest dollar) ?

• A)$640,000
• B)$520,006
• C)$91,416
• D)$591,416

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