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A) Johnson, LLC only purchased one asset this year. Johnson, LLC placed in service on July...

A) Johnson, LLC only purchased one asset this year. Johnson, LLC placed in service on July 19, 2019, machinery and equipment (seven-year property) with a basis of $1,330,000. Assume that Johnson, LLC has sufficient income to avoid any limitations. Calculate the maximum depreciation deduction, including §179 expensing (but ignoring bonus depreciation). (Use MACRS Table 1.)

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Answer #1

Ans:

Property Basis : $1,330,000

MACRS (7 Years Property)

Depreciation for first year : 14.29%

Section 179 Depreciation for 2019 : 100% Upto $1,020,000

Balance amount : $1,330,000 - $1,020,000 = $310,000

Normal Depreciation for first year : $310,000 * 14.29% = $44,299

Depreciation for the first year : $1,020,000 + $44,299 = $1,064,299.

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