Part I: Michael F Fall purchased a new $$3,200,000$ five$-$year class asset on September $15,2023.$ The asset was placed in service for business October $10,2023.$ Assume this was the only asset purchased in $2023.$ Michael elected to take the maximum Section $179$ expense deduction allowed but elected NOT to take additional first$-$year $($bonus$)$ depreciation. Michael$$s taxable income for $2023$ before the cost recovery on this asset was $$700,000.$

Be sure to show all of your calculations for each numbered item!! You must complete the assignment on this worksheet!

$1.$ What is the maximum amount of $179$ that Michael can ELECT $($not deduct$)$ in $2023?$

$2.$ What is the maximum of the Section $179$ election that Michael can DEDUCT in $2023?$ What happens to any Section $179$ not deducted in $2023,$ if any?

$3.$ What is the amount of Michael$$s depreciable basis $($fixed$,$ constant total we have left to depreciate after we have subtracted $179,$ the amount we will use each year to go to the MACRS tables$)?$

$4.$ What is the amount of MACRS depreciation Michael can take in $2023?$

$5.$ What is the total depreciation deduction, including Section $179,$ per Form $4562$ Line $22,$ for $2023?$

$($See page $2$ for #$6$ and #$7$ and Part II$).$

$$

$6.$ Michael sold the asset August $30,2024($during year $2).$ Selling price was $$3,000,000.$

a$.$ What is the amount of regular $($statutory$)$ depreciation Michael can take in $2024($year $2)?$

b$.$ What is Michael$$s adjusted basis after the $2024($year $2)$ cost recovery?

c$.$ What is Michael$$s taxable gain or loss if he sold it for $$3,000,000?$