Question

Calculate the total depreciation for these various assets - All assets are business use.

a. Joe purchased a 5 year asset for $700,000 on 6/13/17. Joe wants to take the maximum amount of depreciation possible (Section 179 depreciation). Taxable income for 2017 was $650,000. Calculate the depreciation expense for 2017. Joe sold the asset in 2018. Calculate the depreciation for 2018.

b. Sarah purchased an apartment complex on 5/5/17 for $1,100,000. Calculate the deprecation for 2017. She disposed the apartment complex on 7/31/20. Calculate the deprecation for 2020.

c. Ralph Co had start up cost of $53,000 in 2017. Ralph Co started its business in March 2017. Calculate total amortization expense for 2017. Ralph Co elects to take additional first year amortization under IRC 195. Calculate the Amortization Exp for 2018.

d. Steve purchased two assets in 2017. A 5 year asset for 70,000 on 10/30/17 and a 7 year asset for $100,000 on 2/9/17. Steve does not want to take Section 179 Depreciation in 2017. Calculate the deprecation expense for 2017. Steve sells the 5 year asset on 8/17/18. Calculate the total depreciation expense for both assets in 2018.

e. Cheryl purchased an office building on 11/1/17 for $800,000. Calculate the depreciation for 2017. She disposed of the building on 4/1/2021. Calculate the depreciation for 2021.

*** Sec 179 is not limited by Assets placed in service or the Income limitation

Answer 1