Dains Diamond Bit Drilling purchased the following assets this year. Asset Purchase Date Original Basis Drill bits
Question:
Asset | Purchase Date | Original Basis | |
Drill bits (5-year) | Mar-13 | $ | 92,400 |
Drill bits (5-year) | Sep-05 | 97,400 | |
Commercial building | May-19 | 268,000 | |
Assume its taxable income for the year was $77,000 before deducting any §179 expense (assume no bonus depreciation but assume that the 2014 §179 limits are extended to 2015). (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) |
a. | What is the maximum amount of 179 expense Dain's may deduct for the year? |
b. | What is Dain's maximum depreciation deduction for the year (including §179 expense)? |
c. | If the January drill bits' original basis was $2,899,000, what is the maximum amount of 179 expense Dain's may deduct for the year? |
Taxation Of Individuals And Business Entities 2016
ISBN: 9781259334870
7th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver