Chaz Corporation has taxable income in 2021 of $316,000 for purposes of computing the 179 expense...

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Chaz Corporation has taxable income in 2021 of $316,000 for purposes of computing the §179 expense and acquired the following assets during the year: Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 September 30 Maximum total depreciation deduction Basis $ 820,000 970,000 108,000 1,539,000 $ 3,437,000 What is the maximum total depreciation deduction that Chaz may deduct in 2021? (Use MACRS Table 1, Table 2, Table 3. Table 4 and Table 5) (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Table 1 MACRS Half-Year Convention Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 32.00 24.49 18.00 9.50 19.20 17.49 14.40 8.55 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 6.55 3.28 44.45 14.81 7.41 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year 25.00% 17.85% 30.00 23.47 18.00 16.76 11.37 11.97 11.37 8.87 4.26 8.87 8.87 3.34 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year 15.00% 10.71% 34.00 25.51 20.40 18.22 12.24 13.02 9.30 8.85 8.86 5.53 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 35.00% 26.00 15.60 11.01 11.01 1.38 Year 1 Year 2 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 11.30 7.06 5.00% 38.00 22.80 13.68 10.94 9.58 3.57% 27.55 19.68 14.06 10.04 8.73 8.73 7.64 TABLE 3 Residential Rental Property Mid-Month Convention Straight Line-27.5 Years Month Property Placed in Service Month 5 Month 6 Month 7 Month 8 1.667% 1.364% 2.273% 1.970% 3.636 3.636 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 Year 1 Year 2-9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Month 1 Month 2 Month 3 3.485% 3.182% 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.97 3.637 3.636 3.637 3.636 2.273 2.879% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 Month 4 2.576% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 2.576 3.637 3.636 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.182 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 2.879 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.485 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 0.152 Month 9 Month 10 Month 11 Month 12 1.061% 0.455% 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 0.455 1.061 0.758% 3.636 3.636 3.637 3.636 3.637 3.636 0.758 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.364 0.152% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.667 TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Month 5 Month 6 Month 7 1.984% 3.175 3.175 3.174 3.175 3.174 Year 1 Year 2-7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Month 1 3.042% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.720 Month 2 2.778% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.984 Month 3 2.513% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.249 Month 4 2.249% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 2.513 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.778 1.720% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.042 1.455% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.132 Month 8 1.190% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.397 Month 9 0.926% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.661 Month 10 0.661% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.926 Month 11 0.397% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.190 Month 12 0.132% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.455 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line 39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 6 Month 7 Month 5 1.605% 2.564 0.963 Year 1 Year 2-39 Year 40 Month 1 2.461% 2.564 0.107 Month 2 2.247% 2.564 0.321 Month 3 2.033% 2.564 0.535 Month 4 1.819% 2.564 0.749 1.391% 2.564 1.177 1.177% 2.564 1.391 Month 8 0.963% 2.564 1.605 Month 9 0.749% 2.564 1.819 Month 10 0.535% 2.564 2.033 Month 11 0.321% 2.564 2.247 Month 12 0.107% 2.564 2.461 Chaz Corporation has taxable income in 2021 of $316,000 for purposes of computing the §179 expense and acquired the following assets during the year: Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 September 30 Maximum total depreciation deduction Basis $ 820,000 970,000 108,000 1,539,000 $ 3,437,000 What is the maximum total depreciation deduction that Chaz may deduct in 2021? (Use MACRS Table 1, Table 2, Table 3. Table 4 and Table 5) (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Table 1 MACRS Half-Year Convention Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 32.00 24.49 18.00 9.50 19.20 17.49 14.40 8.55 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 6.55 3.28 44.45 14.81 7.41 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year 25.00% 17.85% 30.00 23.47 18.00 16.76 11.37 11.97 11.37 8.87 4.26 8.87 8.87 3.34 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year 15.00% 10.71% 34.00 25.51 20.40 18.22 12.24 13.02 9.30 8.85 8.86 5.53 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 35.00% 26.00 15.60 11.01 11.01 1.38 Year 1 Year 2 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 11.30 7.06 5.00% 38.00 22.80 13.68 10.94 9.58 3.57% 27.55 19.68 14.06 10.04 8.73 8.73 7.64 TABLE 3 Residential Rental Property Mid-Month Convention Straight Line-27.5 Years Month Property Placed in Service Month 5 Month 6 Month 7 Month 8 1.667% 1.364% 2.273% 1.970% 3.636 3.636 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 Year 1 Year 2-9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Month 1 Month 2 Month 3 3.485% 3.182% 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.97 3.637 3.636 3.637 3.636 2.273 2.879% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 Month 4 2.576% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 2.576 3.637 3.636 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.182 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 2.879 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.485 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 0.152 Month 9 Month 10 Month 11 Month 12 1.061% 0.455% 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 0.455 1.061 0.758% 3.636 3.636 3.637 3.636 3.637 3.636 0.758 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.364 0.152% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.667 TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Month 5 Month 6 Month 7 1.984% 3.175 3.175 3.174 3.175 3.174 Year 1 Year 2-7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Month 1 3.042% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.720 Month 2 2.778% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.984 Month 3 2.513% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.249 Month 4 2.249% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 2.513 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.778 1.720% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.042 1.455% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.132 Month 8 1.190% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.397 Month 9 0.926% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.661 Month 10 0.661% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.926 Month 11 0.397% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.190 Month 12 0.132% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.455 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line 39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 6 Month 7 Month 5 1.605% 2.564 0.963 Year 1 Year 2-39 Year 40 Month 1 2.461% 2.564 0.107 Month 2 2.247% 2.564 0.321 Month 3 2.033% 2.564 0.535 Month 4 1.819% 2.564 0.749 1.391% 2.564 1.177 1.177% 2.564 1.391 Month 8 0.963% 2.564 1.605 Month 9 0.749% 2.564 1.819 Month 10 0.535% 2.564 2.033 Month 11 0.321% 2.564 2.247 Month 12 0.107% 2.564 2.461

Answer rating: 100% (QA)

Solution Step 1 Determine the MACRS class and recovery period for each asset Asset MACRS class Recov... View the full answer