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	$	1,550,000
Computer equipment	February 10		365,000
Office building	April 2		480,000
Total		$	2,395,000

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? (Round your intermediate calculations to the nearest whole dollar amount.)

Answer 1

Ans: As per the IFRS the maximum deduction for 179 expense 2019 is $1,000,000:

MACRS property table:

Computer= 5 year property

Machinery= 7 year property

Office building= 39 years

Machinery= $1,000,000+ 14.29% of $550,000

= $1,000,000+78,595

=$ 1,078,595

Computer= 20% of 365,000

= $73,000

Office building= 1.819% of $ 480,000

= $ 8731.20

Total = 1,160,326.20