On 3/5 this year, Dog Corporation placed in service 5 year property costing $22,000. What is...

On 3/5 this year, Dog Corporation placed in service 5 year property costing $22,000. What is the maximum depreciation available for the year assuming the company elected additional first-year depreciation but did NOT elect §179 expensing?

Expert Solution

Answer,

In the given case Dog Corporation placed in service 5 year property costing $22000 and taking of maximum depreciation available for the year including the additional first-year depreciation.However Corporation not elected Section 179 expensing.

Additional First Year (Bonus) Depreciation

It is implemented as a part of the 2008 Economic Stimiulus package
Allowed 50% additional "Bonus" Depreciation for first yer
It is allowable for NEW Tangible personal Property placed during the year

Therefore Maximum Depreciation Available for the First year are computed as follows,

SL No	Particlars	Amount($)
i)	5 year Property cost	22,000
ii)	Bonus Depreciaton @50% ($22000*50%)	11,000

iii)	Depreciation Basis ($22000-$11000)	11,000
iv)	Depreciation @20% ($11000*20%)	2,200

			v)	Maximum Depreciation Available for the Year (ii+iv)	13,200

ekkarill92 answered 2 years ago

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