Question

Assume that Timberline Corporation has 2019 taxable income of $240,000 for purposes of computing the §179 expense. It acquired the following assets in 2019: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

	Purchase
Asset	Date		Basis
Furniture (7-year)	December 1	$	450,000
Computer equipment (5-year)	February 28		90,000
Copier (5-year)	July 15		30,000
Machinery (7-year)	May 22		480,000
Total		$	1,050,000
c. What would Timberline’s maximum depreciation deduction be for 2019 if the machinery cost $3,000,000 instead of $480,000 and assuming no bonus depreciation?

Answer 1

Section 179 election not available due to threshold limits.

	(a)		(b)	(a) X (b)
Property	MACRS Basis	Recovery period	Depreciation Rate	MACRS depreciation
Furniture	$       450,000	7 year	14.29%	$   64,305.00
Equipment	$         90,000	5 year	20.00%	$   18,000.00
Copier	$         30,000	5 year	20.00%	$     6,000.00
Machinery	$    3,000,000	7 year	14.29%	$ 428,700.00
Cost recovery				$ 517,005.00

Answer is:

517,005

please rate.