5 1:10-27 MACRS 40% Test and Bonus Depreciation. Small Corporation purchased and placed in ser-vice the following 100% business-use assets (all of the assets were purchased new). Assumethat Small purchased these assets in 2017, when 50% bonus depreciation was available. Smallclaimed bonus depreciation but no Sec. 179 election on all eligible property in 2017 and 2018.• Truck (light-duty, modified non-personal use) costing $20,000: Placed in service onFebruary 15, 2017 with a 5-year MACRS recovery period.• Machinery costing $50,000: Placed in service on May 1, 2017 with a 7-year MACRSrecovery period.• Land costing $60,000: Placed in service on July 1, 2017.• Building costing $100,000: Placed in service on December 1, 2017 with a 39-yearMACRS recovery period.• Equipment costing $40,000: Acquired on December 24, 2017 and placed in service onJanuary 5, 2018 with a 5-year MACRS recovery period.What is Small's total depreciation deduction in each year for 2017 through 2021?

The small total depreciation deduction in the year 2017 through 2021 as,

Answered: personal use) costing $20,000: Placed i…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

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Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 43P: LO.2, 3, 9 On June 5, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset...

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LO.3 Renata Corporation purchased equipment in 2017 for 180,000 and has taken 83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for 110,000. What is the amount and character of Renatas gain or loss?
Effect of depreciation on net income Einstein Construction Co. specializes in building replicas of historic houses. Bree Andrus. president of Einstein Construction, is considering the purchase of various items of equipment on July 1. 20Y2. for $300,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Bee is considenng depreciating the equipment by the straight-line method. She discussed the matter with her CPA and learned that although the straight-line method could be elected, it was to her advantage to use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. She asked for your advice as to which method to use for tax purposes. What factors would you present for Bree’s consideration in the selection of a depreciation method?
LO.2, 3, 9 On June 5, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset costing 560,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). During 2018, his business generated a net income of 945,780 before any 179 immediate expense election. a. Rather than using bonus depreciation, Javier would like to use 179 to expense 200,000 of this asset and then use regular MACRS to cost recover the remaining cost. Given this information, determine the cost recovery deductions that Javier can claim with respect to this asset in 2018 and 2019. b. Complete Javiers Form 4562 (page 1) for 2018. His Social Security number is 123-45-6789.

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personal use) costing $20,000: Placed i MACRS recovery period. ed in service on May 1, 2017 with a 7-y service on July 1, 2017.