Dain’s Diamond Bit Drilling purchased the following assets this year. Assume its
ID: 2445393 • Letter: D
Question
Dain’s Diamond Bit Drilling purchased the following assets this year.
Assume its taxable income for the year was $70,000 before deducting any §179 expense (assume no bonus depreciation but assume that the 2014 §179 limits are extended to 2015). (Use MACRS Table 1,Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
What is the maximum amount of §179 expense Dain may deduct for the year?
What is Dain’s maximum depreciation expense for the year (including §179 expense)?
If the February drill bits’ original basis was $2,376,500, what is the maximum amount of §179 expense for the year? Dain may deduct for the year?(Leave no answer blank. Enter zero if applicable.)
If the February drill bits’ basis was $2,496,500, what is Dain’s maximum §179 expense for the year?(Leave no answer blank. Enter zero if applicable.)
Dain’s Diamond Bit Drilling purchased the following assets this year.
Explanation / Answer
Assume its taxable income for the year was $70,000 before deducting any §179 expense (assume no bonus depreciation but assume that the 2014 §179 limits are extended to 2015). (Use MACRS Table 1,Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) a. What is the maximum amount of §179 expense Dain may deduct for the year? As per the US Tax Laws, a maximum amount of $ 25,000 can be claimed as Section 179 expense by Dain during the year, for the year 2015. b. What is Dain’s maximum depreciation expense for the year (including §179 expense)? The maximum depreciation expense claimed by Dain during the year would be : Depr.Rate Depr $ Drill Bits 110000 20% 22000 Drill Bits 111250 20% 22250 Commercial Building 363000 1.82% 6602.97 50852.97 c. If the February drill bits’ original basis was $2,376,500, what is the maximum amount of §179 expense for the year? Dain may deduct for the year?(Leave no answer blank. Enter zero if applicable.) If the Feb drill bits original basis was $ 2,376,500, the maximum amount of Section 179 expense would be Total Cost of Assets 2850750 Phase out in 2015 200000 (i) Maximum 2015 expense before phaseout 270000 (ii) Lower of (i) and (ii) 200000 allowable as Section 179 deduction d. If the February drill bits’ basis was $2,496,500, what is Dain’s maximum §179 expense for the year?(Leave no answer blank. Enter zero if applicable.) In this case, the amount would remain the same viz. $ 200,000.
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