Question

Required information Problem 10-62 (LO 10-2, LO 10-3) (The following information applies to the questions displayed below) Woolard Supplies (a sole-proprietorship) has taxable income in 2018 of $240.000 be ($179, bonus, or MAC 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.) fore any depreciation deductions RS) and placed some office furniture into service during the year. The furniture had been used Placed In Service March 20 $1,2ee,e0e Basis Ass Office furniture (used) Problem 10-62 Part a preciation deduction for the year? 50,000 of $179, what is Woolard's total depreciation deduction for the year? < Prev | 20 211 of 60 İİİ Next >

Answer 1

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Anwers are highlighted in yellow: Solution: a) Particulars 1) Property placed in service in 2018 2) Elected $179 Deduction 3) Remained asset (furniture) basis 4) MACRS Depreciation rate 5) MACRS Depreciation 6) Taxable income limitation for $179 7) Dedcuted $179 expense Amount 1200000 Total $179qualified property (given) 1150000 (1-2) 14.29%) (7 years, half year convention) 164335 (354) 75665 (Net income-5) 50000 (lesser of elected amt or 6) a) 8) Woolard's total depreciation deduction (164335+50000 214335 or 210762.50 Maximum 179 deduction will be Taxable income before depreciation - MACRS depreciation Particulars Amount 1200000 Total $179qualified property 2500000 (2018 179 limit) 1) Property placed in service in 2018 Threshold for $179 phase-out-2018 3) Phase-out of maximum $179 expense (1-2) 4) Maximum 179 expense before phase-out 5) Phase-out of maximum $179 expense 6) Remaining basis in Furniture 7) MACRS Depreciation-14.29% 8) Maximum $179 expense Deductible for the year (240000-28580) 0 1000000 (2018 179 limit) 0 from (3) 200000 (1-6) 28580 211420 (Net income - 7) Total depreciation that Woolard may deduct in 2018 240000 B)3 179 Carryforward (1000000-211420) 788580