Question
In: Accounting
On February 5, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset...
On February 5, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset costing $422,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2018, his business generated a net income of $506,400 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2019 and 2020. Total cost recovery deduction in 2019: $ Total cost recovery deduction in 2020: $.
Solutions
Expert Solution
The following determines the cost recovery deductions that Javier Sanchez which can be claimed with respect to the assets in 2019 and 2020:
ekkarill92 answered 1 year agoRelated Solutions
On February 5, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset...
On February 5, 2019, Javier Sanchez purchased and placed in
service a new 7-year class asset costing $477,200 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC).
Rather than using bonus depreciation, Javier would like to use §
179 to expense $200,000 of this asset and then use regular MACRS to
cost recover the remaining cost. During 2018, his business
generated a net income of $572,640 before any § 179 immediate
expense...
On June 5, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset...
On June 5, 2019, Javier Sanchez purchased and placed in service
a new 7-year class asset costing $560,000 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC). During 2019, his business generated a
net income of $945,780 before any § 179 immediate expense election.
Rather than using bonus depreciation, Javier would like to use §
179 to expense $200,000 of this asset and then use regular MACRS to
cost recover the remaining...
On June 5, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset...
On June 5, 2019, Javier Sanchez purchased and placed in service
a new 7-year class asset costing $560,000 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC). During 2019, his business generated a
net income of $945,780 before any § 179 immediate expense election.
Rather than using bonus depreciation, Javier would like to use §
179 to expense $200,000 of this asset and then use regular MACRS to
cost recover the remaining...
On May 31, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset...
On May 31, 2018, Javier Sanchez purchased and placed in service
a new 7-year class asset costing $489,200 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC).
Rather than using bonus depreciation, Javier would like to use §
179 to expense $200,000 of this asset and then use regular MACRS to
cost recover the remaining cost. During 2018, his business
generated a net income of $587,040 before any § 179 immediate
expense...
8-43 On June 5, 2016, Javier Sanchez purchased and placed in service a new 7-year class...
8-43 On June 5, 2016, Javier Sanchez purchased and placed
in service a new 7-year class asset costing $550,000 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC). During 2016, his business generated a
net income of $945,780 before any § 179 immediate expense
election.
Determine the maximum deductions that Javier can claim
with respect to this asset in 2016:
Section 179 expense:
Aditional first year depreciation:
MACRS Recovery:
Total deduction:
Stewart purchased and placed in service a 5 year asset on November 23, 2018. It cost...
Stewart purchased and placed in service a 5 year asset on
November 23, 2018. It cost $100,000. He sold the asset on February
19, 2019. Determine his depreciation deduction for
2019
On February 15, 2018, Leo purchased and placed in service a new car that cost $54,600....
On February 15, 2018, Leo purchased and placed in service a new
car that cost $54,600. The business use percentage for the car is
always 100%. He does not take the additional first-year
depreciation or any § 179. If required, round your answers to the
nearest dollar. Click here to access the depreciation table of the
textbook. Click here to access the limits for certain
automobiles.
a. What MACRS convention applies to the new car? Half-year
b. Is the automobile...
On June 5, 2016, Leo purchased and placed in service a new car that cost $20,000....
On June 5, 2016, Leo purchased and placed in service a new car
that cost $20,000. The business use percentage for the car is
always 100%. Leo claims any available additional first-year
depreciation but does not claim any expense under § 179.
a. What MACRS convention applies to the new car?
b. Is the automobile considered "listed property"?
c. Leo's cost recovery deduction in 2016 is ________ and for
2017 is
An asset for drilling was purchased and placed in service by a petroleum production company. Its...
An asset for drilling was purchased and placed in service by a
petroleum production company. Its cost basis is $60,000, and it has
an estimated market value of $12,000 at the end of an estimated
useful life of 14 years. Compute the annual depreciation amount and
the BV at the end of each year using declining balance method with
switchover to straight line method.
An asset for drilling was purchased and placed in service by a petroleum production company. Its...
An asset for drilling was purchased and placed in service by a
petroleum production company. Its cost basis is $50,000 , and it
has an estimated MV of $12,000 at the end of estimated useful life
of 15 years. Compute the depreciation amount in the fourth year and
the BV at the end of the fifth year of life by each of these
methods:
a. The SL method.
b. The 200 % DB method with the switchover to SL.
c....
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