Sanson Enterprises, a multi-location printing company, purchased the following a

Question

Sanson Enterprises, a multi-location printing company, purchased the following assets during 201S New photocopiers costing 5550.000. How much is the maximum cost recovery deduction for 2015. assuming the owners have adequate net Income? Assuming they claimed the maximum In 2O10Thow much is deductible In 2017? Assuming the photocopiers were sold for $75,000 pm April 18. 2018. how much Is the cost recovery deduction? President's used vehicle (2011 Jaguar XL weighing 4.800 pounds) costing $27,500. How much is the maximum cost recovery deduction for 2015. assuming the owners have adequate net Income? Assuming they claimed the maximum in 2015. how much is deductible In 2017? Improvements to real estate leased for 49 years. Cost. $450,000; placed In service June 23. 2015. How much is deductible in 2015? How much for 2024? Sanson Purchased a business In April, including $225,000 allocated to goodwill. How much is deductible in 2015? How much for 2020?

Explanation / Answer

a) Cost of the photocopiers $550,000 Section 179 deduction ( the limit is 500,000 for 2015, so the maximum deduction can be taken under section 179 will be 500,000) $500,000 Basis for Bonus depreciation = 550000 - 500000 $ 50,000 Bonus Depreciation = 50% of the cost after section 179 deduction = (550000 - 500000) x .5 $ 25,000 Basis for MACRS $ 25,000 MACRS Depreciation for 1st year for property with life of 5 years = 20% of the cost remaining after section 179 and bonus depreciation = 25000 x .20 $    5,000 Therefore total cost recovery deduction for 2015 would be = 500000+25000+5000 $530,000 b) Cost recovery deduction in 2017 would be = (550000 - 530000) x 19.20 $    3,840 c) Cost recovery deduction in 2017 would be =(550000 - 530000 - 3840) x 11.52% x (1/2) $       931 a) Cost of vehicle asset classified as 3 year property $ 27,500 Bonus depreciation = 50% of 27500 $ 13,750 MACRS @ .3333 x 13750 $    4,583 Total Depreciation $ 18,333 b) Deduction for 2017 would be (27500 - 18333) x .14180 $    1,300 a) Cost $450,000 Bonus 50% $225,000 Straightline for 50% of remaining cost = (225000/15)x 1/2 $    7,500 Total depreciation in2 015 $232,500 b) Depreciation in 2024 would be $ 15,000 a) Goodwill will be amortized for 15 years for 2015 it would be = (225000 / 15) x (9/12) $ 11,250 b) For 2020 $ 15,000

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