Question

Het Required information Problem 2-62 (LO 2-2, LO 2-3) The following information applies to the questions displayed below.) Woolard Supplies a sole proprietorship) has taxable income in 2019 of $240,000 before any depreciation deductions ($179, bonus, or MACRS) and placed some office furniture into service during the year. The furniture does not qualify for bonus depreciation. (Use MACRS Table 1. Table 2. Table 3. Table 4 and Table 5.) (Do not round intermediate calculations Round your answers to the nearest whole dollar amount.) Asset Office furniture (used) Placed In Service March 20 $1,200,000 Problem 2-62 Parta a. If Woolard elects $50,000 of 5179, what is Woolard's total depreciation deduction for the year?

Answer 1

Please find below table useful to compute desired results: -

с B 240000 1200000 50000 =B2 A 1 Taxable income 2 Asset basis 3 Elects 4 Particulars 5 Property placed in service in 2019 6 Elected $179 deduction 7 Remained asset (furniture) basis 8 MACRS Depreciation rate 9 MACRS Depreciation 10 Taxable Income Limitation for $179 11 Deducted $179 Expense 12 Woolard's total depreciation deduction =B3 7 years, half year convention =B5-B6 =14.29/100 =B7*B8 =B1-B9 =B3 =B9+B11 13 Amount =B2 2550000 1020000 14 Particulars 15 Property placed in service in 2019 16 Threshold for $179 phase-out-2019 17 Phase-out of maximum $179 expense 18 Maximum $179 expense before phase-out 19 Phase-out of maximum $179 expense 20 Remaining basis in furniture 21 MACRS Depreciation @14.29% 22 Maximum $179 expense Deductible for the year 23 Total Depreciation that Woolard may deduct in 2019 24 $179 carry forward limit for 2019 cannot be negative limit for 2019 cannot be negative =B15-B18 =B20*14.29% =B1-B21 =B1 =B18-B22

End results would be as follows: -

B 240,000.00 1.200,000.00 50,000.00 7 years, half year convention 1 Taxable Income 2 Asset basis 3 Elects 4. Particulars 5 Property placed in service in 2019 6 Elected $179 deduction 7 Remained asset (furniture) basis 8 MACRS Depreciation rate 9 MACRS Depreciation 10 Taxable Income Limitation for $179 11 Deducted $179 Expense 12 Woolard's total depreciation deduction 13 14 Particulars 15 Property placed in service in 2019 16 Threshold for $179 phase-out-2019 17 Phase-out of maximum $179 expense 18 Maximum $179 expense before phase-out 19 Phase-out of maximum $179 expense 20 Remaining basis in furniture 21 MACRS Depreciation @14.29% 22 Maximum $179 expense Deductible for the year 23 Total Depreciation that Woolard may deduct in 2019 1.200,000.00 50,000.00 1.150.000.00 14.29% 164.335.00 75,665.00 50,000.00 214,335.00 Amount 1.200,000.00 2,550,000.00 limit for 2019 cannot be negative 1.020,000.00 limit for 2019 cannot be negative 180,000.00 25.722.00 214,278.00 240,000.00 805,722.00