QUESTION 6

1. AMP Corporation (calendar year end) has 2020 taxable income of $1,725,000 before the 179 expense. During 2020, AMP acquired the following assets:

   Asset		Placed in Service	Basis
   Machinery		September 12	$1,540,000
   Computer Equipment		February 10	365,000
   Office Building		April 2	480,000
   Total			$2,385,000

   What is the maximum amount of 179 expense AMP may deduct for 2020?

QUESTION 7

1. Assume that TDW Corporation (calendar year end) has 2020 taxable income of $650,000 before the 179 expense, acquired the following assets during 2020:

   Asset		Placed in Service	Basis
   Machinery		October 12	$2,260,000
   Computer Equipment		February 10	268,000
   Furniture		April 2	880,000
   Total			$3,408,000

   What is the maximum amount of 179 expense TDW may deduct for 2020?

QUESTION 8

1. Assume that Timberline Corporation has 2020 taxable income of $245,000 before the 179 expense.

   Asset	Purchase Date	Basis
   Furniture (7-year)	December 1	$350,000
   Computer Equipment (5-year)	February 28	90,000
   Copier (5-year)	July 15	30,000
   Machinery (7-year)	May 22	480,000
   Total		$950,000

   What is the maximum amount of 179 expense Timberline may deduct for 2020?

QUESTION 9

1. Last Chance Mine (LC) purchased a coal deposit for $780,000. It estimated it would extract 12,000 tons of coal from the deposit. LC mined the coal and sold it reporting gross receipts of $1 million for year 1. During year 1, LC reported net income from the coal deposit activity in the amount of $60,000. In year 1, LC actually extracted 3,000 tons of coal. What is Last Chances cost depletion for years 1?

QUESTION 10

1. Last Chance Mine (LC) purchased a coal deposit for $780,000. It estimated it would extract 12,000 tons of coal from the deposit. LC mined the coal and sold it reporting gross receipts of $1 million for year 1. During year 1, LC reported net income from the coal deposit activity in the amount of $60,000. In year 1, LC actually extracted 3,000 tons of coal. What is Last Chances percentage depletion for year 1 (the applicable percentage for coal is 10 percent)?