AMP Corporation (calendar-year-end) has 2020 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2020, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Placed in AssetService BasisMachinerySeptember 12$1,550,000Computer equipmentFebruary 10 365,000Office buildingApril 2 480,000Total $2,395,000 Q: What is the maximum amount of §179 expense AMP may deduct for 2020?

i) Maximum deduction limit for the year 2020 under §179 expense is $1,040,000. Particular's…

Answered: Q: What is the maximum amount of §179…

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Q: What is the maximum amount of §179 expense AMP may deduct for 2020?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 25P

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

AMP Corporation (calendar-year-end) has 2020 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2020, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

	Placed in
Asset	Service		Basis
Machinery	September 12	$	1,550,000
Computer equipment	February 10		365,000
Office building	April 2		480,000
Total		$	2,395,000

Q: What is the maximum amount of §179 expense AMP may deduct for 2020?

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