Question

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 had been used previously by Liz Woolard (the owner of the business) before it was placed in service by the business (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 Basis $1,263,000 b. If Woolard elects the maximum amount of 5179 for the year, what is the amount of deductible 1179 expense for the year? What is the total depreciation that Woolard may deduct in 2019? What is Woolard 5179 carry forward amount to next year any Deductible $170 pense Total depreciation deduction 5170 cartonward

Answer 1

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Maximum 179 deduction will be = Taxable income before depreciation - MACRS depreciation Solution: Amount 1163000 Total $179qualified property 2550000 (2019 179 limit) Anwers are highlighted in yellow: As per tax year 2019: Particulars Property placed in service in 2019 Threshold for $179 phase-out-2019 Phase-out of maximum $179 expense (1-2) Maximum 179 expense before phase-out Phase-out of maximum $179 expense Remaining basis in Furniture MACRS Depreciation - 14.29% Maximum $179 expense Deductible for the year (240000-20435) 1020000 (2019 179 limit) o from (3) 143000 (1-6) 20435 219565 (Net income - 7) B)1 8) B)2 Total depreciation that Woolard may deduct in 2019 240000 B)3 179 Carryforward (1020000-219565) 800435