Jeff Smith purchased a new $3,150,000 five-year class asset on September 15, 2022. The asset was placed in service for business October 10, 2022. Assume this was the only asset purchased in 2022. Jeff elected to take the maximum Section 179 expense deduction allowed but elected NOT to take additional first-year (bonus) depreciation. Jeffs taxable income for 2022 before the cost recovery on this asset was $600,000.

Revised scenario: Same asset acquisition date, same amount, but this time Jeff asks you to compute the maximum depreciation she can take without electing Section 179 at all, i.e. how can she deduct the most depreciation without using Section 179. Not MACRS.

Show the calculation required to achieve the highest-possible depreciation deduction for 2022 without using Section 179. Label each calculation and describe the depreciation method used.

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Show the calculation of 2023 (year 2) depreciation assuming same sale scenario given in #6.

Show the calculation of adjusted basis at sale date after calculation in 7b.

Show the calculation of Jeffs gain or loss, again, using the same sale proceeds given in #6.