Question

Chaz Corporation has taxable income in 2017 of $356,000 for purposes of computing the §179 expense and acquired the following assets during the year:

	Placed in
Asset	Service		Basis
Office furniture	September 12	$	1,240,000
Computer equipment	February 10		928,000
Delivery truck	August 21		64,000
Total		$	2,232,000

What is the maximum total depreciation expense that Chaz may deduct in 2017? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round your answer to the nearest whole dollar amount.)

Answer 1

Assets placed into service				2,232,000
Less: threshold for Phase out §179				2,030,000
Maximum Phase out expense §179				202,000
Maximum expense before phase out				510,000
Less: Maximum Phase out expense §179				202,000
Maximum expense after phase out				308,000
Chez will received Most benefits when Applying amount of §179 to Most useful life assets. Here furniture.
Assets	Office furniture	Computer equipment	Delivery truck	Total
Useful life in years	7	5	5
Original cost of assets	1,240,000	928,000	64,000
Less: Maximum expense after phase out	308,000
Remaining basis	932,000	928,000	64,000
Bonus Depreciation (50%)	466,000	464,000	32,000
Remaining basis after Bonus Depreciation	466,000	464,000	32,000
MACRS Rate	14.29%	20.00%	20.00%
Depreciation expense	66,591	92,800	6,400
Bonus Depreciation	466,000	464,000	32,000	962,000
Depreciation expense	66,591	92,800	6,400	165,791
Total depreciation	532,591	556,800	38,400	1,127,791
Maximum total depreciation expense that Chaz may deduct in 2017				$        1,127,791