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.)

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 $ 1,360,000 Computer equipment February 10 400,000 Office building April 2 515,000 Total $ 2,275,000

Explanation / Answer

Property Placed in service (1360000+400000) $1,760,000 Threshold for 179 phaseout -2000000 Phaseout maximum (disallowed) $0 Max 179 expense before phaseout 500000 Max after phaseout $500,000 Amt 179 exp Remaining basis R Rate Dep exp Machinery (7 years) 1360000 $500,000 860000 14.29% 122894 Computer (5 years) 400000 400000 20% 80000 Office B uilding (39.5 years) 515000 515000 1.8190% 9367.85 179 expense 500000 Total depreciation expense 712262 Max total dep exp 712262 ans

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