In this assignment, assume that the Sec. 179 and bonus depreciation tax provisions from 2014 are extended through the taxpayers relevant 2015 tax year where applicable.

For a-d, determine the total depreciation amount for 2015 assuming the taxpayer opted out of Sec. 179 and bonus if they were available in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. (20 points total, 5 points each)

	Details at purchase	Total depreciation
a	A bank purchased a new building for its headquarters, totaling $2 million on April 1, 2012.
b	A dentist purchased 10 new chairs and a couch for it waiting room, which cost $3,000 on October 15, 2015.
c	A restaurant purchased booths and chairs totaling $15,000 on November 1, 2015 and kitchen equipment costing $4,000 on June 15, 2015.
d	A telemarketing company purchased a separate computer, office chair, and desk for each of its new staff on January 15, 2014. The total costs for the computers, office chairs, and desks was $30,000, $3,000, and $8,000, respectively.

A hair salon purchases a new computer for the checkout desk on October 21, 2013 for $1,500, which was the only property it purchased that year. The firm sells the equipment on October 3, 2015. Assume the firm always opts out of Sec. 179 and bonus if available and uses a calendar year tax period. How much total depreciation does the firm have for the machine in 2015? (10 points)

A textile company purchased the following assets throughout 2015:

Asset	Placed in service	Initial Basis
Land for mill	January 1	$1,000,000
Mill building	January 1	$300,000
Equipment (new)	March 4	$1,800,000
Small used truck for deliveries	June 8	$25,000
Total		$3,125,000

What is the maximum total depreciation expense possible that the corporation may deduct in 2015? Assume that the land and mill building do not qualify as qualified real property for Sec. 179 and that the company has sufficient taxable income that it creates no binding limitation on any potential Sec. 179 expense (if applicable). To allow better potential for partial credit, make sure to clearly mark your total amount for Sec. 179 expense, bonus, and regular depreciation clearly. (30 points)

Part a. Google acquired the assets of a small company on May 1, 2015 for $20 million where $3 million of it was ultimately allocated to the tax basis of a patent the small company had held. At the date of purchase, the patent had a remaining life (until the patents expiration date) of exactly 5 years (60 months). What was the total amount of amortization that Google can recognize in 2015 for the patent? (10 points) Part b. Based on the discussion in your text (and my notes), would your answer to part a. change if Google had instead directly purchased the patent alone from the company for $3 million instead of purchasing it along with the rest of the assets of the small company for a single purchase price? If so, what is the appropriate amortization for 2015 in this alternative scenario? If not, why doesnt the amortization amount change? (10 points)

Robert started an accounting firm in 2015 and organized as a partnership. Performance of services began on July 1, 2015. The following expenditures were associated with the partnerships activities in 2015:

Expense	Date	Amount
April 1-June 30 rent	March 1	$15,000
June 1-June 30 wages	June 30	$25,000
April 1-June 30 utilities	June 30	$800
Legal fees for partnership agreements	June 25	$12,500
July 1-Sept. 30 rent	July 1	$15,000
July 1-July 31 wages	July 31	$50,000
July 1-Sept. 30 utilities	Sept. 30	$1,600

What is the total amount of the start-up costs expenditures? What is the total amount of organizational expenditures? (5 points)

What amount of the start-up costs and organizational expenditures may the partnership immediately expense in 2015? (5 points)

What amount can the partnership deduct as amortization expense for the organizational expenditures and for the start-up costs for 2015 (not including the amount it immediately expensed)? (5 points)

What would be the total allowable organizational and start-up expenditures, including immediate expensing and amortization, if Robert started a sole proprietorship instead? (5 points)