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On April 20, 2020, Javier Sanchez purchased and placed in service a new 7-year class asset costing $446,000 for use in his landscaping business, which

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On April 20, 2020, Javier Sanchez purchased and placed in service a new 7-year class asset costing $446,000 for use in his landscaping business, which he operates as a single member Li.C (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use $179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2020, his business generated a net income of $535,200 before any 5179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2020 and 2021 . Total cost recovery deduction in 2020:4 Total cost recovery deduction in 2021: 5 b. Complete Javier's Form 4562 (page 1) for 2020. Note: For 2020, the maximum 5179 is $1,040,000 and the threshold amount is $2,590,000. If an amount is zero, enter " 0 ". Enter amounts as positive numbers. 7 Listed property. Enter the amount from line 29 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7,,,, 9 Tentative deduction. Enter the smaller of line 5 or line 8 9 Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions,) 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here > - Section B-Assets Placed in Service During 2020 Tax Year Using the General Depreciation System Section C-Assets Placed in Service During 2020 Tax Year Using the Alternative Depreciation System 20a Class life S/L Section C-Assets Placed in Service During 2020 Tax Year Using the Alternative Depreciation System Part IV Summary (See instructions.)

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