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Posted on Jul 28, 2024

Assume that Timberline Corporation has 2018 taxable income of $276,000 for purposes of computing the $179 expense. It acquired the following assets in 2018: (Use

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Assume that Timberline Corporation has 2018 taxable income of $276,000 for purposes of computing the $179 expense. It acquired the following assets in 2018: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Furniture (7-year) Computer equipment (5-year) Copier (5-year) Machinery (7-year) Total Purchase Date December 1 February 28 July 15 May 22 Basis $ 486,000 126,000 66,000 516,000 $1,194,000 TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 5.76 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 o o o voo AwN- 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 o o o N TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year -NM 35.00% 26.00 15.60 11.01 11.01 1.38 25.0036 21.43 15.31 10.93 8.75 8.74 8.75 1.09 TABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year UN 25.00% 30.00 18.00 11.37 11.37 17.85% 23,47 16.76 11.97 8.87 4.26 8.87 8.87 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the third quarter Year Depreciation Rate for Recovery Period 5-Year 7-Year 15.00% 10.71% 34.00 25.51 20.40 18.22 12.24 13.02 11.30 9.30 8.95 7.06 8.86 5.53 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year 5.00% 3.57% 38.00 22.30 13168 10.94 9.58 27.55 19.68 14.05 10.00 8.73 8.73 7.64 TABLE 3 Residential Rental Property Mid-Month Convention Straight Line-27.5 Years Month Property Placed in Service Year 1 2 3 5 6 7 8 9 10 12 3.485% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 2.273% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.667% 3.636 3.636 3.637 3.636 3.637 3.636 1.061% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 11 0.455% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.637 3.636 3.636 3.637 3.182% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 2.273 2.879% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 2.576 2.576% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.97 1.970% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 0.152 1.364% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 0.455 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 0.758 0.758% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.061 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.364 0.152% 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.667 3.637 3.636 3.637 3.636 3.182 2.879 3.485 TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Year 1 2 3 4 5 6 8 9 10 11 12 3.042% 3.175 3.175 3.174 3.175 3.174 3.175 1.720% 3.175 3.174 3.175 1.190% 3.175 3.175 3.175 3.174 2.249% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.455% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.397% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.174 3.174 2.778% 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.984 2.513% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.249 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.720 1.984% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2.778 0.926% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.042 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.132 3.175 0.661% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.926 0.132% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.455 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 2.513 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.190 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.397 3.175 3.174 3.175 3.174 3.175 0.661 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Year 1 2 L 4 5 6 7 8 9 10 11 2.461% 2-39 2.564 400.107 2.247% 2.564 0.321 3 2.033% 2.564 0.535 1.819% 2.564 0.749 1.605% 2.564 0.963 1.391% 2.564 1.177 1.177% 2.564 1.391 0.963% 2.564 1.605 0.749% 2.564 1.819 0.535% 2.564 2.033 0.321% 2.564 2.247 0.107% 2.564 2.461 | Required: a-1. What is the maximum amount of $179 expense Timberline may deduct for 2018? a-2. What is Timberline's $179 carryforward to 2019, if any? a-1 a-2. $179 expense $179 carryforward b. What would Timberline's maximum depreciation deduction be for 2018 assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.) Depreciation Deduction (including $179 expense) c. What would Timberline's maximum depreciation deduction be for 2018 if the machinery cost $3,360,000 instead of $516,000 and assuming no bonus depreciation? (Round your intermediate calculations to the nearest whole dollar amount.) Depreciation deduction (including $179 expense)