Problem 10-61 (LO 10-2, LO 10-3) Chaz Corporation has taxable income in 2017 of

Question

Problem 10-61 (LO 10-2, LO 10-3) Chaz Corporation has taxable income in 2017 of $380,000 for purposes of computing the 8179 expense and acquired the following assets during the year: Placed in Service Asset Basis Office furniture Computer equipment Delivery truck Total September 12 $1,300,000 February 10 940,000 70,000 $2,310,000 August 21 What is the maximum total depreciation expense that Chaz may deduct in 2017? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round your answer to the nearest whole dollar amount Maximum total depreciation expense

Explanation / Answer

Property Placed in service $2,310,000 Threshold for 179 phaseout -2000000 Phaseout maximum (disallowed) $310,000 Max 179 expense before phaseout 500000 Max after phaseout (500000-310000) $190,000 Amt 179 exp Remaining basis R Bonus depreciation (50%*R) Remaining basis Rate Dep exp Furniture (7 years) 1300000 $190,000 1110000 555000 555000 14.29% 79309.5 Computer (5 years) 940000 940000 470000 470000 20% 94000 Delivery truck (5 year) 70000 70000 35000 35000 20% 7000 179 expense 190000 Bonus Depreciation 1060000 1060000 Total depreciation expense 1430310 Max total dep exp 1430310 ans

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