Class property

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Reference no: EM13925147

Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $400,000 on May 20, 2015. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate § 179 expensing, but she doesn't know which asset she should expense under § 179. She does not claim any available additional first-year depreciation.

Note: Assume the 2014 § 179 amount is extended to 2015.

a. Determine Lori's total deduction if the § 179 expense is first taken with respect to the 5-year class asset.

Immediate expense deduction under § 179

$ 200000

Copier

 

 

Regular MACRS $

 

Furniture

 

 

Regular MACRS $

 

Total deduction

$

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b. Determine Lori's total deduction if the § 179 expense is first taken with respect to the 7-year class asset.

Immediate expense deduction under § 179

$ 400000

Copier

 

 

Regular MACRS $

 

Furniture

 

 

Regular MACRS $

 

Total deduction

$

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Partially Correct

c. If § 179 expense is first allocated to the seven-year class property, the deduction for the year would be mce_markernbsp; larger.

 

 

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Reference no: EM13925147

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