ONLINEFORMS posted a question Oct 25, 2012 at 9:18am
Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2011:

Asset Cost Date Placed in Service
Office equipment $ 10,000 02/03/2011
Machinery 560,000 07/22/2011
Used delivery truck* 15,000 08/17/2011
* Not considered a luxury automobile, thus not subject to the luxury automobile limitations.


During 2011, TM had huge success (and had no §179 limitations) and Steve acquired more assets the next year to increase its production capacity. These are the assets that were acquired during 2012:

Asset Cost Date Placed in Service
Computers & info. system $ 40,000 03/31/2012
Luxury auto† 80,000 05/26/2012
Assembly equipment 475,000 08/15/2012
Storage building 400,000 11/13/2012
† Used 100 percent for business purposes.


TM generated a taxable income in 2012 before any §179 expense of $732,500. (Do not round intermediate calculations. Round final answers to the nearest dollar amount. Omit the "$" sign in your response.)


6.
value:
10.00 points

a.

Compute 2011 depreciation deductions including §179 expense (ignoring bonus depreciation).

2011 depreciation deductions $

b. Compute 2012 depreciation deductions including §179 expense (ignoring bonus depreciation).

2012 depreciation deductions $

c.

Compute 2012 depreciation deductions including §179 expense, but now assume that Steve would like to take bonus depreciation.

2012 depreciation deductions $

d.

Ignoring part (c), now assume that during 2012, Steve decides to buy a competitor’s assets for a purchase price of $350,000. Steve purchased the following assets for the lump-sum purchase price.

Asset Cost Date Placed in Service
Inventory $ 20,000 09/15/2012
Office furniture 30,000 09/15/2012
Machinery 50,000 09/15/2012
Patent 98,000 09/15/2012
Goodwill 2,000 09/15/2012
Building 130,000 09/15/2012
Land 20,000 09/15/2012

2012 depreciation deductions $