On June 5, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset costing
Question:
On June 5, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset costing $560,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). During 2018, his business generated a net income of $945,780 before any § 179 immediate expense election.
a. Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. Given this information, determine the cost recovery deductions that Javier can claim with respect to this asset in 2018 and 2019.
b. Complete Javier’s Form 4562 (page 1) for 2018. His Social Security number is 123-45-6789.
Step by Step Answer:
a 2018 Section 179 expense no business income limitation 200000 MACRS cost recovery 560000 200000 0...View the full answer
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
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