Question

# Assume that Sivart Corporation has 2018 taxable income of \$1,750,000 for purposes of computing the §179...

Assume that Sivart Corporation has 2018 taxable income of \$1,750,000 for purposes of computing the §179 expense and acquired several assets during the year. The delivery truck was acquired in a nontaxable transaction. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

 Placed in Asset Service Basis Machinery June 12 \$ 1,440,000 Computer equipment February 10 70,000 Delivery Truck-used August 21 93,000 Furniture April 2 310,000 Total \$ 1,913,000

b. What is the maximum total depreciation (§179, bonus, MACRS) that Sivart may deduct in 2018 on the assets it placed in service in 2018?

Maximum Section 179 Deduction limit in 2018 = 1000000

first limit will be applied to Delivery Truck-used (93000) and then remaining 907000 (1000000-93000) to machinery

Rates are applied on the basis of mid-quarter

Part B

 Asset Original Basis §179 Expense Remaining Basis Bonus Depreciation Remaining Basis Rate Depreciation Expense Machinery (7-year) 1,440,000 907000 533000 266500 266500 17.85% 47570 Computers (5-year) 70,000 70000 35000 35000 35% 12250 Delivery Truck (5-year) 93,000 93000 0 15% Furniture (7-year) 310,000 310,000 155,000 155,000 17.85% 27668 §179 Expense 1000000 Bonus depreciation 456500 Total Depreciation Expense 1543988