Question

""Compute MACRS allowable for Oak Co. for its tax returns for 2015, 2016, 2017 and 2018.
All items were placed in service when purchased unless stated otherwise.
In February 2015 Oak purchased five Office desks (five year items) cost 40,000 each. Because Oak made very little money in 2015 the accountants decided it would be best to decline all special write-offs in 2015.
In December 2017 Oak moved to a smaller office and put two of the desks out for garbage pick-up.
On January 5, 2016 Oak purchased six fork lifts (five year items) for $100,000 each. On August 28, 2016 Oak purchased a widget (ten year item) for 350,000.
On March 28, 2017 Oak purchased another fork lift, $100,000. On November 20, 2017 Oak purchased a used super widget (also ten years) for $750,000.
Section 179 and special first year apply unless declined

Answer 1

As section 179 allowes taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost to capitalized and depreciated. To claim dedection organisation need to purchase qualifying assets between 1st january to 31st december of the tax year you are claiming. Accordingly MACRS allowable for Oak Co. for deferent years are as followes:

For 2015 $40,000*5= $200,000 (as five office desk purchased in february 2015)

For 2016 $100,000*6+$350,000= $950,000 (as all assets purchased between 1st january to 31st december)

For 2017 $100,000+$750,000= $850,000 (as all assets purchased between 1st january to 31st december)

For 2018 Nil, as there are no purchase in tax year 2018.