8-38 (LO. 2, 3, 9) Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $420,000 on May 20, 2021. Len expects the taxable income derived from her business (before considering any amount expensed under $179) to be about $550,000 Lon has determined that she should elect immediate $ 179 expensing in the amount of $520,000, but she doesn't know which asset she should completely expense under 5 179. She does not claim any available additional first-year depreciation Click here to access Exhibit 8.1 and the depreciation table to use for this problem. If an amount is zero, enter "0", a. Determine Lor's total cost recovery deduction if the 179 expense is first taken with respect to the 5-year class asset 5-year class property. Immediate expense deduction under 179 200,000 Regular MACRS 7-year class property Immediate expense deduction under 5 179 320,000 Regular MACRS 14,290 Total deduction 534,290 eck My Work te d. Determine the present value of the tax savings from the cost recovery deductions for both assets, assuming that Latin the 24% marginal tax state and Federal income bracket and that she elects 9 179 for the 7-year asset. Assume MACRS depreciation and a 6% discount rate with the following present value factors Year Factor Year Factor 2021 1.000 2025 0.7921 2022 0.9434 2026 0.7473 2023 0.8900 2027 0.7050 2024 0.8396 2020 0.6651 Round each present value computation to the nearest dollar. The present value of the tax savings from the cost recovery deductions for both assets 146,366 x Check My Work Incomect e. Assume the same facts as in part (d), except that Lori decides not to use 179 on either asset. Determine the present value of the tax- savings under this choice. In addition, determine which option Lori should choose. Round each present value computation to the nearest dollar. The present value of the tax savings under this choice is s 15,996 X. Check My Work Practicum Agree.pdf Previous Next > Staw Al Problem 8-38 (LO. 2, 3, 9) Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $420,000 on May 20, 2021. Lori expects the taxable income derived from her business (before considering any amount expensed under 5 179) to be about $550,000. Lo has determined that she should elect immediate $ 179 expensing in the amount of $520,000, but she doesn't know which asset she should completely expense under $ 179. She does not claim any available additional first-year depreciation Click here to access Exhibit 8.1 and the depreciation table to use for this problem. If an amount is zero, enter "0". a. Determine Lori's total cost recovery deduction if the $ 179 expense is first taken with respect to the 5-year class asset. 5-year class property Immediate expense deduction under $179 Regular MACRS 200,000 7-year class property Immediate expense deduction under 5 179 320,000 Regular MACRS 14,290 Total deduction 534,290 Check My Work 00 Previous Next ellook Video d. Determine the present value of the tax savings from the cost recovery deductions for both assets, assuming that Lont is in the 24% marginal tax state and Federal income bracket and that she elects $ 179 for the 7-year asset. Assume MACRS depreciation and% discount rate with the following present value factors: Year Factor Year Factor 2021 1,000 2025 0.7921 2022 0.9434 2026 0.7473 2023 0.8900 2027 0.7050 2024 0.8396 2028 0.6651 Round each present value computation to the nearest dollar. The present value of the tax savings from the cost recovery deductions for both assets 146,366 Feedback Check My Work Incorrect e. Assume the same facts as in part (d), except that Lori decides not to use 179 on either asset. Determine the present value of the tax savings under this choice. In addition, determine which option Lori should choose. Round each present value computation to the nearest dollar. The present value of the tax savings under this choice is 15,996 X Upitate