Question

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation deductions (§179, bonus, or MACRS) and acquired the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

Asset	Placed In Service	Basis
Office furniture (used)	March 20	$	590,000

a. If Woolard elects $50,000 of §179, what is Woolard’s total depreciation deduction for the year?

b. If Woolard elects the maximum amount of §179 for the year, what is the amount of deductible §179 expense for the year? What is the total depreciation expense that Woolard may deduct in 2017? What is Woolard's §179 carryfoward amount to next year, if any?

Answer 1

a. Woolard’s total depreciation deduction for the year = $ 127,166

1	Property placed in service	5,90,000	Qualifying Asset Total Value
2	Elected 179 amount	-50,000
3	Remaining Asset Basis	5,40,000	(1) - (2)
4	MACRS Depreciation Rate	14.29%	7 yrs half year convention
5	MACRS Depreciation	77,166	(3) x (4)
6	Taxable income limitation for 179	72,834	150000 - (5)
7	Deductible 179	50,000	Lesser of elected amount and (6)
8	Total Deductible Depreciation	1,27,166	(5) + (7)

2. Wooland deduct $137,139 of §179 and carry forward $ 3,62,861 expences of §179 for next year. Total depreciaon decuctible for 2017 is $ 150,000

1	Property placed in service	5,90,000	Qualifying Asset Total Value
2	Maximum 179 expences for phase out	5,00,000	2017 amount 179 (b) (1)
3	Remaining amount	90,000	For regular depreciation
4	Regular Depreciation Rate	17.15%
5	Regular Depreciation Amount	15,433	For Whole year
6	Property usage Months of 2017	10	March to Dec
7	Regular Depreciation for 2017	12,861	For 10 months
8	Expences limitation	1,50,000	limited to your taxable income
9	Deductible of 179 for the year	1,37,139	(8) - (7)
10	Expences Carry forward for next year	3,62,861	(2) - (9)