Question

Chaz Corporation has taxable income in 2014 of $343,000 before the §179 expense and acquired the following assets during the year:

    

Asset	Placed in Service	Basis
Office furniture	September 12	$1,190,000
Computer equipment	February 10	918,000
Delivery truck	August 21	59,000
Total		$2,167,000

What is the maximum total depreciation expense that Chaz may deduct in 2014? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Take the §179 deduction only on the Furniture. Round your answer to the nearest whole dollar amount.)

TABLE 1 MACRS Half-Year Convention Depreclatlon Rate for Recovery Perlod Year 10-year 15-year 3-year 33.33 44.45 14.81 7.41 5-year 7-year 20-year 20.00 32.00 19.20 11.52 11.52 5.76 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 3.750 7.219 6.677 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 4 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 8 10 12 13 14 15 16 17 18 19 20 21

Answer 1

Deduction u/s 179 for furniture is 1 million (as per latest rules)

Bonus depreciation for the year above 1million $ I.e 1190000$

Hence normal depreciation for the furniture is 0 $

Depreciation for the computer equipment

Cos of acquisition = 918,000$

Depreciation rate for 2014 4th quarter = 5%

Depreciation = 45,900

Depreciation for the delivery truck

Cost of acquisition = 59,000

depreciation rate from 3rd quarter = 15%

Depreciation = 8,850