Question

McKenzie purchased qualifying equipment for his business that cost $298,900 in 2018. The taxable income of...

McKenzie purchased qualifying equipment for his business that cost $298,900 in 2018. The taxable income of the business for the year is $79,200 before consideration of any § 179 deduction.

a. McKenzie's § 179 expense deduction is $_______ for 2018. His § 179 carryover to 2019 is $._______?

b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment? Hint: See Concept Summary 8.5.
McKenzie's § 179 expense deduction is $_________ for 2018. His § 179 carryover to 2019 is $_______?

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Answer #1

a. McKenzie's § 179 expense deduction is $79200_ for 2018. His § 179 carryover to 2019 is $._219,700_

Ans:

Amount eligible to claim is upto profit available and remaining is carry forward=$298,900-$79200=$219700

b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment? Hint: See Concept Summary 8.5.

If Mckenzie decided to use additional first year( bonus) depreciation on the equipment than the whole amount after deduction i.e. $219700 ($298,900-$79200=$219700) will be written off and allowed to be depreciated over the life of the equipment.

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