QUESTION 1 AMP Corporation (calendar year end) has 2017 taxable income of $900,0
ID: 2431476 • Letter: Q
Question
QUESTION 1
AMP Corporation (calendar year end) has 2017 taxable income of $900,000 before the §179 expense. During 2017, AMP acquired the following assets:
Asset
Placed in Service
Basis
Machinery
September 12
$1,530,000
Computer Equipment
February 10
355,000
Office Building
April 2
480,000
Total
$2,365,000
What is the maximum amount of §179 expense AMP may deduct for 2017?
QUESTION 2
Assume that TDW Corporation (calendar year end) has 2017 taxable income of $650,000 before the §179 expense, acquired the following assets during 2017:
Asset
Placed in Service
Basis
Machinery
October 12
$1,290,000
Computer Equipment
February 10
274,000
Furniture
April 2
880,000
Total
$2,444,000
What is the maximum amount of §179 expense TDW may deduct for 2017?
QUESTION 3
Assume that Timberline Corporation has 2017 taxable income of $185,000 before the §179 expense.
Asset
Purchase Date
Basis
Furniture (7-year)
December 1
$350,000
Computer Equipment (5-year)
February 28
90,000
Copier (5-year)
July 15
30,000
Machinery (7-year)
May 22
480,000
Total
$950,000
What is the maximum amount of §179 expense Timberline may deduct for 2017?
Asset
Placed in Service
Basis
Machinery
September 12
$1,530,000
Computer Equipment
February 10
355,000
Office Building
April 2
480,000
Total
$2,365,000
Explanation / Answer
Solution for 1)
Note: Sec179 Expense of $510000 should be used for the asset with the lowest first year deprreciation percentage , therefore AMP expense the machinery using section 179 of $510000. Half Yeear Convention will be used.
Note : As per chegg only first question can be solved.
Computattion of Maximum Depreciation Expense Including Sec 179 Expense Asset Amount Sec 179Exp Quarter Life Rate Depreciation Maachinery 1530000 510000 3 7 14.29% 145758 Comp Equipment 355000 1 5 20% 71000 Office Building 480000 2 39 1.82% 8731.2 Section 179 Expense 510000 Maximum Depreciation Expense including Sec 179 Expense ( Excluding Bonus) 735489.2Related Questions
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