[The following information applies to the questions displayed below.] Dain's Diamond Bit Drilling purchased the following assets
Question:
[The following information applies to the questions displayed below.]
Dain's Diamond Bit Drilling purchased the following assets this year.
Asset | Purchase Date | Original Basis |
---|---|---|
Drill bits (5-year) | Mar-26 | $ 91,700 |
Drill bits (5-year) | Aug-17 | 96,700 |
Commercial building | Jun-12 | 254,000 |
Assume its taxable income for the year was $70,000 for purposes of computing the 179 expense (assume no bonus depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.)
Note: Leave no answer blank. Enter zero if applicable.
b. What is Dain's maximum depreciation deduction for the year (including 179 expense)?
Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.
c. If the January drill bits' original basis was $2,892,000, what is the maximum amount of 179 expense Dain's may deduct for the year?
d. If the January drill bits' original basis was $4,292,000, 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