Reference no: EM132657113

Problem - Dr. Cliff Payne purchased and placed in service $612,085 of new fixed assets in his dental practice during the current year.

Office furniture and fixtures $ 70,000

Computers and peripheral equipment 67,085

Dental equipment 475,000

Using his financial reporting system, he concludes that the depreciation expense on Schedule C of Form 1040 is $91,298.

Office furniture and fixtures ($70,000 x 14.29%) $10,003

Computers and peripheral equipment ($67,085 x 20%) 13,417

Dental equipment ($475,000 x 14.29%) 67,878

Total $91,298

In addition, this year Dr. Payne purchased another personal residence for $480,000 and converted his original residence to a rental property. Has Dr. Payne correctly calculated the depreciation expense for his dental practice? Will he be able to deduct any depreciation expense for his rental properties?