Assume that Timberline Corporation has 2018 taxable income of $240,000 for purposes of computing the §179 expense. It acquired the following assets in 2018:

a. What is the maximum amount of §179 expense Timberline may deduct for 2018? What is Timberline€™s §179 carryforward to 2019, if any?
b. What would Timberline€™s maximum depreciation deduction be for 2018 assuming no bonus depreciation?
c. What would Timberline€™s maximum depreciation deduction be for 2018 if the machinery cost $3,000,000 instead of $480,000 and assuming no bonus depreciation?

Transcribed Image Text:

Purchase Date Asset Basls Furniture (7-year) Computer equipment (5-year) Copier (5-year) Machinery (7-year) Total December 1 February 28 July 15 May 22 $ 450,000 90,000 30,000 480,000 $1,050,000