Question

Required Information Problem 2-62 (LO 2-2, LO 2-3) The following Information apples to the questions displayed below of 3 Woolard Supplies (a sole proprietorship) has taxable income in 2019 of $240,000 before any depreciation deductions (6179. bonus, or MACRS) and placed some office furniture into service during the year. The furniture does not qualify for bonus depreclation. (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) Placed In Service March 20 poed Asset Of+ice furniture (used) Basis $1,200,eee Print Problem 2-62 Part c c. Woolard Is concerned about future limitations on Its $179 expense. How much S179 expense should Woolard expense this year If it wants to maximize its depreclation this year and avold any carryover to future years? $179 expense

Answer 1

MACRS - Modified Accelerated Cost Recovery System

Office Furniture - 7 Yrs

Depreciation Method - 200% Declining Balance

Section 179 Expenses ;

Property qualifies for bonus depreciation only if:

• it has a useful life of 20 years or less (this includes all types of tangible personal business property and software you buy, but not real property, and
• you purchase it from someone who is unrelated to you (it can’t be a gift or inheritance)

So office furniture having life of 7 yrs so bonus depreciation is not allowed for this assets.