a. Compute the maximum depreciation deduction that Redwood can take in 2021 and igen 2022 on each of these properties assuming one-half of the cost of each qualifying property bb was expensed under section 179 and an election out of bonus depreciation was made for each property class. Assume the equipment is 7-year property. b. Assume that Redwood elects the maximum allowed Section 179 expense on the equipment acquired on June 30, 2021, and that the equipment costs $1,200,000. The company uses bonus depreciation and regular MACRS to depreciate the rest of the cost. Redwood's business income limitation (taxable income before Section 179 expense, but after all other expenses, including depreciation) is $950,000. Compute the maximum total depreciation deduction (179, bonus, and regular depreciation) for the equipment for 2021.

a. Compute the maximum depreciation deduction that Redwood can take in 2021 and igen 2022 on each of these properties assuming one-half of the cost of each qualifying property bb was expensed under section 179 and an election out of bonus depreciation was made for each property class. Assume the equipment is 7-year property. b. Assume that Redwood elects the maximum allowed Section 179 expense on the equipment acquired on June 30, 2021, and that the equipment costs $1,200,000. The company uses bonus depreciation and regular MACRS to depreciate the rest of the cost. Redwood's business income limitation (taxable income before Section 179 expense, but after all other expenses, including depreciation) is $950,000. Compute the maximum total depreciation deduction (179, bonus, and regular depreciation) for the equipment for 2021.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 76P

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