Question

AMP Corporation (calendar-year-end) has 2019 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2019, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

	Placed in
Asset	Service		Basis
Machinery	September 12	$	1,550,000
Computer equipment	February 10		365,000
Office building	April 2		480,000
Total		$	2,395,000

b. What is the maximum total depreciation, including §179 expense, that AMP 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

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Answer is highlighted in yellow: As per Tax year 2019 rules, answer may be different for different year: Solution: $1,177,468 Answer: b) Explanation: Half year convention will be used: Step.01 Assets Amount Sec.179 Exp. Quarter Life Rate Depreciation Machinery 1550000 1020000 3rd 7 14.29% 75737 Comp. Eq. 365000 l 1st 5 20.00% 73000 Office Building 480000 2nd 39 1.819% 8731 Section 179 expense 1020000 Maximum depreciation expense including $179 expense (excluding bonus) | 1177468 Step.02 Step.03 Maximum 179 deduction will be 1000000: Amount 1915000 Total $179qualified property 2550000 (2019 179 limit) 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 Maximum $179 expense after phase-out (4-5) 1020000 (2019 179 limit) 0 from (3) 1020000 (4-5) but not below O