Question

Lanyard purchased office equipment for use in his business (7 year property). He paid 100,000 for the equipment on july 1, 2017. Lanyard did not purchase any other property during the year. for 2017, his business ha a net income of 350,000, before depreciation and before considering the election to expense.

A) what is the maximum amount that lanyard can deduct in 2017 under the election to expense?

B) What is the total depreciation (regular depreciation under the amount allowed underthe election to expense) on the office equipment for 2017, assuming Lanyard uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?

C) What isLanyards total depreciation deduction for 2018 on the 2017 purchase of equipment?

Answer 1

Part A

the maximum amount that lanyard can deduct in 2017 under the election to expense = $100,000 may be deducted under the election to expense

Part B

$100,000 is the total depreciation (regular depreciation under the amount allowed underthe election to expense) on the office equipment for 2017, assuming Lanyard uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense.

Part C

$0 is Lanyards total depreciation deduction for 2018 on the 2017 purchase of equipment.