Question
Required information Skip to question [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship) has taxable income in 2022 of
Required information Skip to question
[The following information applies to the questions displayed below.]
Woolard Supplies (a sole proprietorship) has taxable income in 2022 of $240,000 before any depreciation deductions (179, bonus, or MACRS) and placed some office furniture into service during the year. The furniture does not qualify for bonus depreciation.
(Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
Note: Do not round intermediate calculations.
Round your intermediate calculations and final answers to the nearest whole dollar amount.
Asset Placed In Service Basis
Office furniture (used) March 20 $ 1,191,000
Table 1 MACRS Half-Year Convention
Depreciation Rate for Recovery Period | ||||||
---|---|---|---|---|---|---|
3-Year | 5-Year | 7-Year | 10-Year | 15-Year | 20-Year | |
Year 1 | 33.33% | 20.00% | 14.29% | 10.00% | 5.00% | 3.750% |
Year 2 | 44.45 | 32.00 | 24.49 | 18.00 | 9.50 | 7.219 |
Year 3 | 14.81 | 19.20 | 17.49 | 14.40 | 8.55 | 6.677 |
Year 4 | 7.41 | 11.52 | 12.49 | 11.52 | 7.70 | 6.177 |
Year 5 | 11.52 | 8.93 | 9.22 | 6.93 | 5.713 | |
Year 6 | 5.76 | 8.92 | 7.37 | 6.23 | 5.285 | |
Year 7 | 8.93 | 6.55 | 5.90 | 4.888 | ||
Year 8 | 4.46 | 6.55 | 5.90 | 4.522 | ||
Year 9 | 6.56 | 5.91 | 4.462 | |||
Year 10 | 6.55 | 5.90 | 4.461 | |||
Year 11 | 3.28 | 5.91 | 4.462 | |||
Year 12 | 5.90 | 4.461 | ||||
Year 13 | 5.91 | 4.462 | ||||
Year 14 | 5.90 | 4.461 | ||||
Year 15 | 5.91 | 4.462 | ||||
Year 16 | 2.95 | 4.461 | ||||
Year 17 | 4.462 | |||||
Year 18 | 4.461 | |||||
Year 19 | 4.462 | |||||
Year 20 | 4.461 | |||||
Year 21 | 2.231 |
a. If Woolard elects $50,000 of 179, what is Woolard's total depreciation deduction for the year?
b. If Woolard elects the maximum amount of 179 for the year, what is the amount of deductible 179 expense for the year? What is the total depreciation that Woolard may deduct in 2022? What is Woolard's 179 carryforward amount to next year, if any?
c. Woolard is concerned about future limitations on its 179 expense. How much 179 expense should Woolard expense this year if it wants to maximize its depreciation this year and avoid any carryover to future years?
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