Question

Assume that TDW Corporation (calendar-year-end) has 2018 taxable income of $674,000 for purposes of computing the §179 expense. The company acquired the following assets during 2018: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

	Placed in
Asset	Service		Basis
Machinery	September 12	$	2,273,000
Computer equipment	February 10		266,900
Furniture	April 2		885,100
Total		$	3,425,000

b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2018 on the assets it placed in service in 2018 assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.)

Answer 1

Description	Amount ($)	Explanation
(1) Property placed in service	34,13,000	Total of qualifying assets
2) Threshold for §179 phase-out	25,00,000	2018 amount [§179(b)(2)]
(3) Phase-out of maximum §179 expense	9,13,000	(1) – (2) (permanently disallowed)
(4) Maximum 179 expense before phase-out	10,00,000	2018 amount [§179(b)(1)]
(5) Phase-out of maximum §179 expense	9,13,000	From (3)
Maximum §179 expense after phase-out(10,00,000-9,13,000)	87,000	(4) – (5), not limited by taxable income