1) Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal...

1) Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2019. During the six months ending June 30, 2019, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income?

		$32,000
		$28,000
		$64,000
		$56,000

2) Ashley owns an unincorporated manufacturing business. In 2019, she purchases and places in service $2,650,000 of qualifying five-year equipment for use in her business. Her taxable income from the business before any depreciation deduction is $900,000. Ashley will elect out of bonus depreciation but plans to take the maximum allowable deduction under Sec. 179. Which of the following statements is true regarding the Sec. 179 election?

		She can deduct $1,020,000 as a Sec. 179 deduction in 2019, with no carryover to next year.
		She can deduct $920,000 as a Sec. 179 deduction in 2019, with no carryover to next year.
		She can deduct $900,000 as a Sec. 179 deduction in 2019; $20,000 may be carried over to next year.
		She can deduct $900,000 as a Sec. 179 deduction in 2019, with no carryover to next year.

Solutions

Expert Solution

1) Bailey, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2019. During the six months ending June 30, 2019, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income?
$32,000
$28,000
$64,000	Correct	($40000-$8000)x 12/6	$ 64,000.00
$56,000

2) Ashley owns an unincorporated manufacturing business. In 2019, she purchases and places in service $2,650,000 of qualifying five-year equipment for use in her business. Her taxable income from the business before any depreciation deduction is $900,000. Ashley will elect out of bonus depreciation but plans to take the maximum allowable deduction under Sec. 179. Which of the following statements is true regarding the Sec. 179 election?
She can deduct $1,020,000 as a Sec. 179 deduction in 2019, with no carryover to next year.
She can deduct $920,000 as a Sec. 179 deduction in 2019, with no carryover to next year.
She can deduct $900,000 as a Sec. 179 deduction in 2019; $20,000 may be carried over to next year.	Correct
She can deduct $900,000 as a Sec. 179 deduction in 2019, with no carryover to next year.

ekkarill92 answered 1 year ago

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