2.[The following information applies to the questions displayed below.]

AMP Corporation (calendar-year-end) has 2017 taxable income of $900,000 for purposes of computing the 179 expense. During 2017, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

Placed in

Asset

Service

Basis

Machinery

September 12

$

1,470,000

Computer equipment

February 10

455,000

Office building

April 2

570,000

Total

$

2,495,000

a. What is the maximum amount of 179 expense AMP may deduct for 2017?

Maximum 179 expense deductible

?

3. Lax, LLC purchased only one asset during the current year (a full 12-month tax year). Lax placed in service computer equipment (5-year property) on August 26 with a basis of $23,000. Calculate the maximum depreciation expense for the current year (ignoring 179 and bonus depreciation). (Use MACRS Table 1)

MULTIPLE CHOICE

a. $2,600

b. $3,458

c. $ 3,600

d. $4,600

e. none of the choices are correct

5. Roth, LLC purchased only one asset during the current year. Roth placed in service computer equipment (5-year property) on November 1^st with a basis of $50,500. Calculate the maximum depreciation expense (ignoring 179 and bonus depreciation). (Use MACRS Table 2)

6. Alexandra purchased a $37,000 automobile during 2017. The business use was 70 percent. What is the allowable depreciation for the current year (ignore any possible bonus depreciation)?Exhibit 10-8

7. Oksana started an LLC on November 2 of the current year. She incurred $32,000 of start-up costs. How much of the start-up costs can be immediately expensed for the year? How much amortization may Oksana deduct in the first year?

8. Wheeler LLC purchased two assets during the current year (a full 12-month tax year). Wheeler placed in service computer equipment (5-year property) on November 16 with a basis of $27,000 and furniture (7-year property) on April 20 with a basis of $18,200. Calculate the maximum depreciation expense (ignoring 179 and bonus depreciation). (Use MACRS Table 2) (Round final answer to the nearest whole number.)

MULTIPLE CHOICE

a. $3,170

b. $4,599

c. $6,457

d. $7,085

e. none of the choices are correct