On June 5, 2017, Javier Sanchez purchased and placed in service a new 7-year class asset...
On June 5, 2017, Javier Sanchez purchased and placed in service a new
7-year class asset costing $560,000 for use in his landscaping business,
which he operates as a single member LLC (Sanchez Landscaping LLC). During
2017, his business generated a net income of $945,780 before any§ 179 immediate
expense election.
a. Determine the maximum deductions that Javier can claim w ith respect to this
asset in 2017 and 2018.
Homework Answers
Year 2017
The amount of the deduction is the total cost of the Asset upto $500,000 for each individual item.
Total cost 560,000
Sec 179 Deduction -500,000
Bonus Depreciation Deduction -30,000
(50% CAP in 2017)
Normal 1st year Depreciation (60000/7)= -8570
Total Deduction in 2017 : (500,000+30000+12000) = 538570
Year 2018
60000/7 = 8570
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