Question

Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end) has 2019 taxable income of $650,000 for purposes of computing the $179 expense. The company acquired the following assets during 2019: (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,000 263,000 880,000 $ 3,413,000 b. What is the maximum total depreciation, including $179 expense, that TDW may deduct in 2019 on the assets it placed in service in 2019, assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.)

Answer 1

b. Maximum total depreciation = 414,063

Asset	Original basis	$179 expense	Remaining basis	Rate	Depreciation expense
Machinery [7 year]	2,270,000	87,000	2,183,000	3.57%	77933
Computer equipment [ 5 year]	263,000		263,000	35%	92050
Furniture [ 7 year]	880,000		880,000	17.85%	157080
Sec 179 expense					87000
					414063

* Mid quarter convention used.

Total property	3,413,000
Less: Sec 179 phase out	2,500,000
Phase out of maximum 179 expense	913,000
Maximum 179 expense before phase out	1,000,000
Maximum 179 expense before phase out	87,000