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	$	1,370,000
Computer equipment	February 10		405,000
Office building	April 2		520,000
Total		$	2,295,000

a. What is the maximum amount of §179 expense AMP may deduct for 2019?

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?

c. The vehicle cost $33,000 and business use is 100 percent (ignore §179 expense).

d The vehicle cost $85,000, and business use is 100 percent for

e. The vehicle cost $85,000, and she used it 80 percent for business.

f . The vehicle cost $85,000, and she used it 80 percent for business. She sold it on March 1 of year 2 .

g .The vehicle cost $85,000, and she used it 20 percent for business.

h. The vehicle cost $85,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent.

Answer 1

Dear Student,

Part C, D E, and F are related to other question and as per HOMEWORKLIB POLICY only the first question should be answered. Kindly take note of it. Each new question should be posted separately.

Part A

Maximum 179 expense deductible

$1000000

	amount	explanation
1. property place in service in 2019	2295000	total 179 qualified property
2. threashold for 179 phase-out	2500000	2019 amount (179 b(2)
3. phase out of maximum 179 expense	0	(1-2)(permanently disallowed), not less than 0
4. maximum 179 expense before phase out	1000000	2019 amount 179b(1)
5. phase out of maximum 179 expense	0	from 3
Maximum 179 expense after phase out	1000000	(4-5)

Part B

Maximum depreciation expense

$1143332

Asset	Original Basis	§179 Expense	Remaining Basis	Rate	Depreciation Expense
Machinery (7-year)	1370000	1000000	370000	14.29%	52873
Computer Equipment (5- year)	405000		405000	20.00%	81000
Office building (39 year)	520000		520000	1.819%	9459
§179 Expense					1000000
Total cost recovery					1143332