On June 5, 2018, Javier Sanchez purchased and placed in service a new 7-year dass asset costing $560,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). During 2018, his business generated a net income of $948,780 before any 5 179 immediate expense election Rather than using bonus depreciation, Javier would like to use 5 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. It 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 2018 and 2019 Total cost recovery deduction in 2018: 251,444 Total cost recovery deduction in 2019: 88,164 b. Complete Javier's Form 4562 (page 1) for 2018. Note: For 2018, the maximum 5 179 IS $1,000,000 and the threshold amount is $2,500,000. If an amount is zero, enter "O". Enter amounts as positive numbers. OMB No. 1545-0172 Form 4562 Depreciation and Amortization Department of the 2018 (Including Information on Listed Property) Treasury Internal Attach to your tax retum. Attachment Revenue Service (99) Information about Form 4562 and its separate instructions is at www.lrs.gov/form4562. Sequence No. 179 Name(s) shown on return Business or activity to which this form relates Identifying number Javier Sanchez Sanchez Landscaping, LLC 123-45-6789 Part I Election To Expense Certain Property Under Section 179 Note: if you have any listed property, complete Part V before you complete Part 1 1 Maximum amount (see instructions) 1,000,000 2 Total cost of section 170 property placed in services instructions): 2 489,200X 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 3 2,500,000 4 Reduction in limitation. Subtract line from line 2. If or less entero 4 5 5 1,000,000 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter-O-. It married Kling separately, see instructions (a) Description of property (b) Cost (business use only) (c) Elected cost Landscaping equipment 489,200 x 200,000 7 Usted property. Enter the amount from line 29 7 8 Total elected cost of section 179 property. Add amounts in column (C), lines 6 and 7 8 200,000 9 9 200,000 Tentative deduction Enter the smaller of line 5 or line 3 10 Carrycover of dis allowed deduction from line 13 of your 2017 Form 4562 11 Business income limitation, Enter the smaller of business income (not less than zero) or tine (see instructions) 10 0 11 1,020,000 X 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 12 200,000 13 Carryover of dis allowed deduction to 2019. Add lines 9 and 10, less line 12 13 0 Note: Don't use Part II of Part It below for listed property Instead, use Part Part 11 Special Depreciation Allowance and Other Depreciation (Don't indude listed property. See instructions) 14 Special depreciation allowance for qualified property (other than listed property placed service during the tax year(see instructions) Property subject to section 16000) efection 15 14 15 16 16 Other depreciation (including ACAS) Part II MACRS Depreciation (Don't under sted property instruction) Section A 17 MARS dductions for a placed in service in tribe 201 17 18 you recting to service that also check (a) Classification or property Section 8-Assets Placed in Service During 2018 Tax Year Using the General Depreciation System (b) Month and (c) Basis for depreciation year placed in (business/investment use only-see (a) Recovery (e) (1) Method Service Convention period instructions) (9) Depreciation deduction 19a 3-year property 5-year property e 7-year property 7 yrs. HY DOS d 10-year property e 15-year property 1 20-year property 925-year property 25 yrs SAL Residential rental 27.5 yrs MM S/L 12 y 30 yrs property 27.5 yrs MM S/L # Nonresidential real 39 yrs MM 5/L. property MM S/L Section Assets Placed in Service During 2018 Tax Year Using the Alternative Depreciation System 20 Classe SAL b 12-year 5/1 30-year MM S/L do-year MM S/L Part IV Summary (See instructions 21 Listed property. Entramount om line 20 22 Total. Add amounts tromi 12 lines through 17 e 19 and 20 in volume (9), and line 21. inter and on the propriate lines of your retum Partnerships and corporation 22 23 For as shown above and placed in service during the current year anber the portion of the band attributable to section 203A 23 For Paperwork Reduction Act Notice, se separate instructions CNN 12906 Form 4562 2018) 10 21