Question

Chaz Corporation has taxable income in 2016 of $372,000 before the §179 expense and acquired the following assets during the year:

	Placed in
Asset	Service		Basis
Office furniture	September 12	$	1,280,000
Computer equipment	February 10		936,000
Delivery truck	August 21		68,000
Total		$	2,284,000

What is the maximum total depreciation expense that Chaz may deduct in 2016? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round your answer to the nearest whole dollar amount.)

Answer 1

	Maximum depreciation allowable:
	Asset			Original Basis	S 179 Expense	Remaining Basis	Bonus Depreciation	Remaining Basis	Rate	Depreciation Expense
	Office furniture (7 year)			1280000	226000	1054000	527000	527000	14.29%	75308
					(Note:1)
	Computer Equipment (5 Year)			936000		936000	468000	468000	20%	93600
	Delivery truck (5 year)			68000		68000	34000	34000	20%	6800
	S 179 expense									175708
	Bonus depreciation						1029000			1029000
	Total depreciation									1204708
	Note:
	1. Section 179 expense
						Amount
	Total qualifying asset					2284000
	Threshold for S 179 phaseout					2010000
	Permenanently disallowed (a)					274000
	Maximum S 179 expense before phaseout (b)					500000
	Maximum S 179 expense after phaseout (b)-(a)					226000