Question
In April of 2019, Jack purchased and placed in service $70,000 of automobiles (5-year class life) for his business. In August of 2019, he purchased
In April of 2019, Jack purchased and placed in service $70,000 of automobiles (5-year class life) for his business. In August of 2019, he purchased and placed in service $40,000 of trucks (5-year class life) for his business. In November of 2019, he purchased and placed in service $90,000 of furniture (7-year class life) for his business. These are the only assets placed in service during the year. His taxable income (before the 179 deduction) for 2019 is $50,000. Jack elects to take his full allowable Section 179 deduction but no additional first-year depreciation in 2019. What depreciation convention (half-year mid-quarter, mid-month) will he be required to use under MACRS? Which assets should he allocate his Section 179 deduction to in 2019 in order to minimize his 2019 tax liability? What is Jack's depreciation deduction for 2019?
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