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  1. business
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  3. in january of the current year, your company purch

In January of the current year, your company purchased a sport utility vehicle (SUV) weighing...

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Accounting

In January of the current year, your company purchased a sport utility vehicle (SUV) weighing 6,100 pounds in the amount of $130,000 for business-use only. At December 31st, you (the business owner) provide all the necessary information and documentation to your tax advisor to discuss tax options, more specifically depreciation. Your goal is to minimize the business's tax liability. After preparing financial statements, business income for the year was $85,000. Your accountant presents you with two options for depreciating the vehicle: MACRS (modified accelerated cost recovery system) or Section 179 deduction.

In your original (initial) post, write a letter to the client addressing the following concepts:

  1. Difference between MACRS (modified accelerated cost recovery system) and Section 179 deduction
  2. How might the company's financial goals, future plans, and cash flow situation influence the choice between MACRS and the Section 179 deduction?
  3. Share your insights and perspectives on which strategy you believe would be more suitable for the given scenario and why.

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