A taxpayer places in service the following used properties during the year: Type

Question

A taxpayer places in service the following used properties during the year: Type of property Date placed in service Cost Machinery March 17 55,000 Equipment October 25 524,000 Warehouse November 8 160,000 The taxpayer elects to expense the maximum amount of Section 179 expense allowed in 2016 and elects to apply Section 179 expensing to the equipment. For purposes of determining whether the half-year or mid-quarter convention applies, the percentage of property placed in service in the fourth quarter is: 30.4% 77.0% 20.6% 90.5% 43.1%

Explanation / Answer

Solution: 30.4%

Working:

Fourth quarter personal property acquisitions = $524,000 $500,000 = $24,000.

Total personal property = $55,000 + $24,000 = $79,000.

% of property placed in service in the fourth quarter = $24,000/$79,000 = 30.4%.

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