Question

Chaz Corporation has taxable income in 2019 of $364,000 for purposes of computing the §179 expense and acquired the following assets during the year:

Asset	Placed in Service	Basis
Office Furniture	September 12	$701,000
Computer Equipment	February 10	$932,000
Delivery Truck	August 21	$66,000
Qualified improvement	September 30	$1,533,000
Total		$3,232,000

What is the maximum total depreciation deduction that Chaz may deduct in 2019? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round your answer to the nearest whole dollar amount.)

Answer 1

Description	Amount $	Explanation
(1) Property placed in service in 2019	3,232,000	Total qualified property
(2) Threshold for §179 phase-out	2,550,000	2019 amount [§179(b)(2)]
(3) Phase-out of maximum §179 expense	682,000	(1) – (2) (permanently disallowed)
(4) Maximum 179 expense before phase-out	1,020,000	2019 amount [§179(b)(1)]
(5) Phase-out of maximum §179 expense	682,000	From (3)
(6) Maximum §179 expense after phase-out	338,000	(4) – (5)
Maximum amount of §179 expense	$ 338,000

Hafl Year convention will be used
Asset	Original Basis $	§179Expense	Remaining Basis $	Bonus Depreciation 100% $	Balance $	Rate	Depreciation Expense $
Office Furniture ( 7 year )	701,000		701,000	701,000	-	14.29%	-
Computer Equipment (5- year)	932,000		932,000	932,000	-	20.00%	-
Delivery Truck (5 Year )	66,000		66,000	66,000	-	20.00%	-
Qualified Improvement (39 Year )	1,533,000	338,000	1,195,000	-	1,195,000	0.749%	8,951
Bonus Depreciation							1,699,000
§179 Expense							338,000
Total	3,232,000						2,045,951
Maximum total depreciation Expense	$2,045,951