Facts: The Tepper Company, a calendar year taxpayer, began doing business on 1/1/16. Tepper is in the business of providing data analysis services (it is NOT a manufacturer). During 2016, Tepper acquired the following assets and capitalized the following expenses:

On 4/1/2016, Tepper acquired the assets of Fessler, Co (one of Teppers competitors) and allocated basis to the following assets:

$200,000 of the acquired computer software was off the shelf purchased by the competitor at Best Buy. The remaining $485,000 of the computer software was specially developed for Fesslers use by paid consultants.

For 2016, Tepper reported taxable income of $5 million prior to taking into account Code section 179, depreciation or amortization.

Project Requirements next page.

For 2016: Assume that Tepper will make a Code 179 election for the full amount allowed for 2016 and will make the appropriate amortization elections.

REQUIRED:

Required: Compute Teppers 2016 cost recovery deductions related to the assets listed (showing calculations for each asset - REMEMBER BONUS DEPRECIATION WHERE APPLICABLE) for assets placed in service during 2016. Use the Chapter 7 Cost Recovery presentation materials to help you.

Required: All projects must be submitted in Excel and, where computations are required, Excel must be used to make them (i.e., do not use Excel as WORD). There should be separate tabs as follows:

Lead Summarizes the 179/depreciation/amortization deductions

179 Tab: Analyzes 179 and computes the 179 deduction

Bonus Tab: Analyzes bonus depreciation and computes it

MACRS Tab: Provides MACRS depreciation computations

Other: Provides computation for other cost recovery (e.g., amortization and non-MACRS property)

Description Date Placed in Service Initial Basis Start-up Costs Office Furniture Computer Hardware Calculators Copy Machines Land Building Paving Office Fixtures S53,000 75,000 10,000 5,000 12,000 300,000 450,000 100,000 80,000 6/13/16 6/13/16 10/15/16 Description Date Placed in Service Initial Basis Start-up Costs Office Furniture Computer Hardware Calculators Copy Machines Land Building Paving Office Fixtures S53,000 75,000 10,000 5,000 12,000 300,000 450,000 100,000 80,000 6/13/16 6/13/16 10/15/16