Question

Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the 5179 expense and acquired the following assets during the year, Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 5 February 10 August 21 September 301 Basis 781,600 916,000 58,000 ,517,000 $ 3,272,000 What is the maximum total depreciation deduction that Chaz may deduct in 2019? (Use MACRS Table 1 Table 2. Table 3. Table 4 and Table 5.) (Round your answer to the nearest whole dollar amount.) Madmum total depreciation deduction

Answer 1

Asset	Original Basis	§179 Depreciation expense	Remaining Basis	Bonus Depreciation 50%	Remaining Basis	MACR Rate	Depreciation expenses
Office furniture (7 years)	$781,000.00	$228,000.00	$553,000.00	$276,500.00	$276,500.00	14.29%	$39,511.85
Computer equipment (5 years)	$916,000.00		$916,000.00	$458,000.00	$458,000.00	20.00%	$91,600.00
Delivery truck (5 years)	$58,000.00		$58,000.00	$29,000.00	$29,000.00	20.00%	$5,800.00
Qualified improvement property (100% bonus depreciation)	$1,517,000.00		$1,517,000.00	$1,517,000.00	$0.00
Total	$1,755,000.00	$228,000.00		$763,500.00
§179 Depreciation expense							$228,000.00
Total Bonus Depreciation							$763,500.00
Total Depreciation Expenses							$1,128,411.85
Chaz will receive the most benefit by applying the §179 amount to the furniture 7­year property.
§179 Depreciation expense
Property placed in service (a)		$3,272,000.00
Threshold for §179 phase­out (b)		$2,500,000.00
Phase­out of maximum §179 expense (c)		$772,000.00
Maximum 179 expense before phase­out (d)	$1,000,000.00
Phase­out of maximum §179 expense (c)	$772,000.00
Maximum §179 expense after phase­out (d-c)	$228,000.00