80 1500 x 02280 342 full year deprec step 2 find

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3.A textile company purchased the following assets throughout 2017:AssetPlaced in serviceInitial BasisLand for millJanuary 1$1,000,000Mill buildingJanuary 1$300,000Equipment (new)March 4$1,800,000Small used truck for deliveriesJune 8$25,000Total$3,125,000What is the maximum totaldepreciation expense possible that the corporation may deductin 2017? Assume that the land and mill building do not qualify as qualified real property for Sec. 179 and that the company has sufficient taxable income that it creates no binding limitation on any potential Sec. 179 expense (if applicable). To allow better potential for partial credit, make sure to clearly mark your total amount for Sec. 179 expense, bonus, and regular depreciation each separately before showing the maximum total depreciation.(30 points)2
Possible Answer #1: First, apply Sec. 179: i) determine any phase-out and ii) decide which asset to apply it to. The total qualified tangible personal property is $1,825,000 (land and building are not personal), which is below the beginning phase-out threshold of $2,030,000, and I say the income limitation is not binding. Thus, they can take up to $510,000 of Sec. 179 expense. NOTE: we first used the 179 expense to wipe out the used property (since it can’t get bonus depreciation). We then allocate the remaining$485,000 to the Equipment.AssetOrig.Basis§179ExpenseRemain.BasisBonusRemain.BasisReg.DeprecRateReg.DeprecExpenseEquipment (7-year)$1,800,000$485,000$1,315,000$657,500$657,50014.29%$93,956.75Used truck (5- year)$25,000$25,000$0$020%$0Building (non-res)$300,000$300,000$300,0002.461%$7,383§179 Expense $510,000Bonus depreciation$657,500$657,500Total Depreciation Expense (regular deprec =$101,339.75)$1,268,90Possible Answer #2: First, apply Sec. 179: i) determine any phase-out and ii) decide which asset to apply it to. The total qualified tangible personal property is $1,825,000 (land and building are not personal), which is below the beginning phase-out threshold of $2,030,000, and I say the income limitation is not binding. Thus, they can take up to $510,000 of Sec. 179 expense.
NOTE: I also accepted this answer (below). Simply apply the entire 179 expense to the asset with the lowest MACRS %. Remember,

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