Problem 8-12 Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (L0 8.2, 8.4, 8.5) During 2020, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business: Item Date Acquired Cost June 2 $50,000 September 15 8,000 2.000 November 18 Manufacturing equipment (7 year) Office furniture office computer Passenger automobile (used 85 percent for business) Warehouse May 31 55,000 July 23 Building 170,000 Land 135,000 Pepe uses the accelerated depreciation method under MACRS and takes bonus depreciation Complete Form 4562, Depreciation and Amortization to determine the depreciation expense. If required, round your answers to the nearest dollar. If an amount is zero, enter"0". Enter amounts as positive numbers. Placed in Service After 1986 Click here to access the depreciation tables and here to view Table.B.1. Recovery.Periods. for Assetjie AM 1 2 Name(s) shown on return Business or activity to which this form relates Pepe Guardio Manufacturing Part 1 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) 2 Total cost of section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction in limitation Subtract line 3 from line 2. 1 zero or less, entero 5 Dollar Imitation for tax year. Subtract line 4 from line 1. If zero or less entero If married filing separately see instructions (a) Description of property (b) Cost (business use only) (c) Elected cost 3 4 5 a 9 10 11 12 7 Listed property. Enter the amount from line 29 2 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. 10 Carryover of disallowed deduction from line 13 of your 2019 Form 4562 11 Business Income limitation. Enter the smaller of business income (not less than ero) 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 2021. Add lines 9 and 10, less line 12 13 Note: Don't use Part II or Part II below for usted property. Instead, use Part Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See Instructions.) 14 Special depredation allowance for qualified property (other than listed property) placed in service during the tax year se instructions 15 Property subject to section 1680) election 16. Other depreciation induding ACRS) Part IIT MACRS Depreciation (Don't indude listed property. See Instructions) Section A 17 MACAS deductions for a placed in service in tears beginning before 2020 15 16 12 Check My Work Section A 17 17 MARS deductions for assets placed in service in tax years beginning before 2020 18 If you are decting to group any assets laced in service during the tax year into one or more general asset accounts check here Section 1- Assets placed in Service During 2020 Tax Year Using the General Depreciation System (6) Classification of (b) Month and year (c) Gast for depreciation (butines/investment (a) Recovery (e) ( property placed in service use only seeintruction) Convention Method 1993-year property b 5 year property 67 rear property (o) Depreciation deduction period d 10 var property e 15-vear property 20-year property 9 25 year property 25 SAL Nusidential conta 27.5 MM SAL property 27.5. MM SL Ihonresidential 07/20 V 29 MM rapt SAL Section Assets placed in Service During 2020 Tax Year Using the Alternative Depreciation System 20a Chali S 12. 12 SU 30 year MM d40-year 40 MM Part IV Summary (see instruction) 21 Led property. Enter amount from 22 Total. Add amounts from it, line 14 through 17 e 19 and 20 Inc. and line 21. Enter here and on the propriate lines of your return. Partners and corporation instruction 23 Forms shown above and placed in service during the entranter the portion of the basis attributable to section 263A cost 23 30 21 Note: For any vehicle for which you are using the standard mileage rate or deducting tease expense, complete only 24a, 24b. columns (a) through (C) of Section A, all of Section By and Section Cif applicable Section A Depreciation and Other Information (Caution: See the instructions for imits for passenger automobiles.) 24. Do you have evidence to support the business/investment use claimed? Yes No 24b If "Yes" is the evidence written? Yes No (a) (b) (d) (e) (1) (o) (h) (0) Basis for Business depreciation Elected Type of property list veides Date placed in Cost or other Recovery Method/ Depreciation Investment use Section 179 service basis (business/ period Convention deduction percentage Investment cost only) 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use. See instructions 25 26 Property used more than 50% in a qualified business use: Passenger automobile 05/20 HY svrs. 27 Property uted 50or less in a qualified business use: IS/L. SAL S/L 20 Add amount in column Ch. lines 25 through 27. Enter here and on line 21, page 1.. 20 29 Add amount in column line 26. Enter here and online. Page 1 29 Section Information on Use of Vehicles Complete this section for vehides used by a sole proprietor partner, or other more than wor related person. If you provided vehides to your employees, finanswer the questions in Section to see if you meet exception to completing this section for those veides (c) (0) 30 Tocal busines/investment is driven during the year Vahide 1 Wahide Vehicle Whicle Vahide 5 Vahid (don't indude commuting miles) 31 Total commuting miles driven during the Year 32 Total other personal noncommutino) miles driven Problem 8-12 Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (L0 8.2, 8.4, 8.5) During 2020, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business: Item Date Acquired Cost June 2 $50,000 September 15 8,000 2.000 November 18 Manufacturing equipment (7 year) Office furniture office computer Passenger automobile (used 85 percent for business) Warehouse May 31 55,000 July 23 Building 170,000 Land 135,000 Pepe uses the accelerated depreciation method under MACRS and takes bonus depreciation Complete Form 4562, Depreciation and Amortization to determine the depreciation expense. If required, round your answers to the nearest dollar. If an amount is zero, enter"0". Enter amounts as positive numbers. Placed in Service After 1986 Click here to access the depreciation tables and here to view Table.B.1. Recovery.Periods. for Assetjie AM 1 2 Name(s) shown on return Business or activity to which this form relates Pepe Guardio Manufacturing Part 1 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) 2 Total cost of section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction in limitation Subtract line 3 from line 2. 1 zero or less, entero 5 Dollar Imitation for tax year. Subtract line 4 from line 1. If zero or less entero If married filing separately see instructions (a) Description of property (b) Cost (business use only) (c) Elected cost 3 4 5 a 9 10 11 12 7 Listed property. Enter the amount from line 29 2 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. 10 Carryover of disallowed deduction from line 13 of your 2019 Form 4562 11 Business Income limitation. Enter the smaller of business income (not less than ero) 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 2021. Add lines 9 and 10, less line 12 13 Note: Don't use Part II or Part II below for usted property. Instead, use Part Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See Instructions.) 14 Special depredation allowance for qualified property (other than listed property) placed in service during the tax year se instructions 15 Property subject to section 1680) election 16. Other depreciation induding ACRS) Part IIT MACRS Depreciation (Don't indude listed property. See Instructions) Section A 17 MACAS deductions for a placed in service in tears beginning before 2020 15 16 12 Check My Work Section A 17 17 MARS deductions for assets placed in service in tax years beginning before 2020 18 If you are decting to group any assets laced in service during the tax year into one or more general asset accounts check here Section 1- Assets placed in Service During 2020 Tax Year Using the General Depreciation System (6) Classification of (b) Month and year (c) Gast for depreciation (butines/investment (a) Recovery (e) ( property placed in service use only seeintruction) Convention Method 1993-year property b 5 year property 67 rear property (o) Depreciation deduction period d 10 var property e 15-vear property 20-year property 9 25 year property 25 SAL Nusidential conta 27.5 MM SAL property 27.5. MM SL Ihonresidential 07/20 V 29 MM rapt SAL Section Assets placed in Service During 2020 Tax Year Using the Alternative Depreciation System 20a Chali S 12. 12 SU 30 year MM d40-year 40 MM Part IV Summary (see instruction) 21 Led property. Enter amount from 22 Total. Add amounts from it, line 14 through 17 e 19 and 20 Inc. and line 21. Enter here and on the propriate lines of your return. Partners and corporation instruction 23 Forms shown above and placed in service during the entranter the portion of the basis attributable to section 263A cost 23 30 21 Note: For any vehicle for which you are using the standard mileage rate or deducting tease expense, complete only 24a, 24b. columns (a) through (C) of Section A, all of Section By and Section Cif applicable Section A Depreciation and Other Information (Caution: See the instructions for imits for passenger automobiles.) 24. Do you have evidence to support the business/investment use claimed? Yes No 24b If "Yes" is the evidence written? Yes No (a) (b) (d) (e) (1) (o) (h) (0) Basis for Business depreciation Elected Type of property list veides Date placed in Cost or other Recovery Method/ Depreciation Investment use Section 179 service basis (business/ period Convention deduction percentage Investment cost only) 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use. See instructions 25 26 Property used more than 50% in a qualified business use: Passenger automobile 05/20 HY svrs. 27 Property uted 50or less in a qualified business use: IS/L. SAL S/L 20 Add amount in column Ch. lines 25 through 27. Enter here and on line 21, page 1.. 20 29 Add amount in column line 26. Enter here and online. Page 1 29 Section Information on Use of Vehicles Complete this section for vehides used by a sole proprietor partner, or other more than wor related person. If you provided vehides to your employees, finanswer the questions in Section to see if you meet exception to completing this section for those veides (c) (0) 30 Tocal busines/investment is driven during the year Vahide 1 Wahide Vehicle Whicle Vahide 5 Vahid (don't indude commuting miles) 31 Total commuting miles driven during the Year 32 Total other personal noncommutino) miles driven