Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation dedu

Question

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation deductions (§179, bonus, or MACRS) and acquired the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

a. If Woolard elects $50,000 of §179, what is Woolard’s total depreciation deduction for the year?

b. If Woolard elects the maximum amount of §179 for the year, what is the amount of deductible §179 expense for the year? What is the total depreciation expense that Woolard may deduct in 2017? What is Woolard's §179 carryfoward amount to next year, if any?

Asset Placed In Service Basis Office furniture (used) March 20 $ 590,000

Explanation / Answer

a. Woolard’s total depreciation deduction for the year = $ 127,166

2. Wooland deduct $137,139 of §179 and carry forward $ 3,62,861 expences of §179 for next year. Total depreciaon decuctible for 2017 is $ 150,000

1 Property placed in service        5,90,000 Qualifying Asset Total Value 2 Elected 179 amount          -50,000 3 Remaining Asset Basis        5,40,000 (1) - (2) 4 MACRS Depreciation Rate 14.29% 7 yrs half year convention 5 MACRS Depreciation            77,166 (3) x (4) 6 Taxable income limitation for 179            72,834 150000 - (5) 7 Deductible 179            50,000 Lesser of elected amount and (6) 8 Total Deductible Depreciation        1,27,166 (5) + (7)

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