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Evaluate the appropriateness of Bretts plan

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Question - Brett started a new construction business in April 2019. In connection with the new business, he purchased a new backhoe for $60,000 in June 2019 and immediately placed it in service. The new business is struggling and expecting to show a loss for 2019. Brett is considering expensing the $60,000 cost of the backhoe under §179 on the 2019 tax return. Brett has been awarded a large project for 2020, and will show a substantial profit (over $100,000) for the year ending 12/31/2020. Your response must fully address the following:

Evaluate the appropriateness of Brett's plan.

Explain your position.

How could changes in tax law affect the appropriateness of Brett's plan?

Reference no: EM132560538

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