On March 20, 2019, Javier Sanchez purchased and placed in service a new 7-year class asset costing $299,600 for use in his landscaping business, which he operates as a single member LLC (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 2018, his business generated a net Income of $359,520 before any 5 179 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 Javler Sanchez can claim with respect to this asset in 2019 and 2020. Total cost recovery deduction in 2019: $ Total cost recovery deduction in 2020: $ b. Complete Javier's Form 4562 (page 1) for 2019. Note: For 2019, the maximum $ 179 Is $1,020,000 and the threshold amount is $2,550,000. If an amount is zero, enter "0". Enter amounts as positive numbers. OMB No. 1545-0172 Depreciation and Amortization Form 4562 (Including Information on Listed Property) 2019 Attach to your tax return. Attachment Department of the Treasury Internal Information about Form 4562 and its separate Sequence Revenue Service (99) Instructions is at www.irs.gov/form4562. 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 Identifying numb 123-45-6789 1 Name(s) shown on return Business or activity to which this form relates avier Sanchez Sanchez Landscaping, LLC Part I Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. Maximum amount (see instructions) Total cost of section 179 property placed in service (see instructions). Threshold cost of section 179 property before reduction in limitation (see instructions) Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter - Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter - - 0f married filing separately, see 1 2 2 3 4 4 5 instructions 5 (a) Description of property Landscaping equipment (b) Cost (business use only) (c) Elected cost 7 Listed 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 9 Tentative deduction Enter the smaller of line 5 or line 8... 10 Carryover of disallowed deduction from line 13 of your 2018 Form 4562 9 10 Check My Work 9 Tentative deduction. Enter the smaller of line 5 or line 8 9 10 Carryover of disallowed deduction from line 13 of your 2018 Form 4562 + 10 11 12 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions)... 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11. 13 Carryover of disallowed deduction to 2020. Add lines 9 and 10, less line 12... 13 Note: Don't use Part II or Part II below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See Instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see Instructions) 415 Property subject to section 168(1)(1) election Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See Instructions.) Section A 12 MACRS deductions for assets placed in service in tax years beginning before 2019 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check 14 15 16 LE 17 bere Section B-Assets Placed in Service During 2019 Tax Year Using the General Depreciation System (b) Month (c) Basis for depreciation (d) tek Check My Work O ELE Previous a @ 6 Next 105 63F
