Chaz Corporation has taxable income in 2017 of $368,000 for purposes of computin
ID: 2561932 • Letter: C
Question
Chaz Corporation has taxable income in 2017 of $368,000 for purposes of computing the §179 expense and acquired the following assets during the year:
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.)
Table 1 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_7e/table_1.jpg
Table 2 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_7e/table_2.jpg
table 3 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_7e/table_3.jpg
table 4 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_7e/table_4.jpg
table 5 https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_7e/table_5.jpg
Placed in Asset Service Basis Office furniture September 12 $ 1,270,000 Computer equipment February 10 934,000 Delivery truck August 21 67,000 Total $ 2,271,000Explanation / Answer
Phase-out of maximum §179 expense = Property placed in service -Threshold for §179 phase-out = 2271000-2,030,000 = 241000
Maximum §179 expense after phase-out = Maximum 179 expense before phase-out - Phase-out of maximum §179 expense = 510000-241000 = 269000
the maximum total depreciation expense that Chaz may deduct in 2017 is 941121
Asset Original Basis §179Expense RemainingBasis Bonus depreciation remaining basis MACRS rate depreciaiton expnese Furniture (7-year) 12,70,000 2,69,000 10,01,000 500500 5,00,500 14.29% 71521 computers (5-year) 9,34,000 9,34,000 467000 4,67,000 20.00% 93400 Delivery Truck(5 year) 67,000 67,000 33500 33,500 20.00% 6700 §179 Expense 269000 bonus depreciation 500500 Total 941121