AMP Corporation (calendar-year-end) has 2017 taxable income of $900,000 for purp

Question

AMP Corporation (calendar-year-end) has 2017 taxable income of $900,000 for purposes of computing the §179 expense. During 2017, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

a. What is the maximum amount of §179 expense AMP may deduct for 2017?

b. What is the maximum total depreciation expense, including §179 expense, that AMP may deduct in 2017 on the assets it placed in service in 2017 assuming no bonus depreciation? (Round your answer to the nearest whole dollar amount.)

     

     

Placed in Asset Service Basis Machinery September 12 $ 1,520,000 Computer equipment February 10 480,000 Office building April 2 595,000 Total $ 2,595,000

Explanation / Answer

ans 1 proeprty Placed in service in 2017 (1520000+480000) 2000000 Phase out limit for section 179 (b)(2) 2030000 Phase out 0 Max section 179 expense before phaseout $510,000 Phase out of maximum expense 0 Maximum amount of section 179 allowed $510,000 ans ans 2 Particulars Class Original basis 179 expense Basis Remaining Dep Rate Dep expense Machinery 7 year 1520000 510000 1010000 14.29% 144329 Computer Equipment 5 year 480000 480000 20% 96000 Office Building 39 years 595000 595000 1.819% 10823 section 179 expense 510000 maximum Total depreciation expense 761152 If any doubt please comment

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