If you can help me solve this problem. Thank you Winnie the Pooh, Inc. acquires

ID: 2471993 • Letter: I

Question

If you can help me solve this problem. Thank you

Winnie the Pooh, Inc. acquires the following new seven-year class property in 2015. Use dollar 25,000 as the maximum sect 179 amount: Winnie elects sect 179 for Asset A first and then Asset B, if there is any sect 179 amount remaining. Winnie's taxable income from his business would not create a limitation for purposes of the sect 179 deduction. Determine Winnie's depreciation deduction for each asset for 2015. Determine Winnie's total depreciation deduction for 2015.

Explanation / Answer

1) We summarize as follows

Now ,

Total cost =88125

179 Deduction = 25000

Amount after 179

= 88125- 25000

= 63125

Additional Bonus = 50 %

= 63125 x 50 %,

31562.5

Normal depreciation

=10 %

= 63125 x 10%,

= 6312.50

Total Bonus + normal depreciation

= 31562.5 + 6312.5,

2) Now Total depreciation deduction is 37875

+ 25000 ( 179 deduction), = 62875

Asset Cost Sec. 179 Deduction A 22700 22700 B 28500 2300 ( 25000 - 22700) C 36925 - Total 88125 25000