! Required information (The following information applies to the questions displayed below.) While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Computers (5-year) Office equipment (7-year) Furniture (7-year) Start-up costs Purchase Date October 30, Y1 October 30, Y1 October 30, Y1 October 30, Y1 Basis $ 15,000 10,000 3,000 17,000 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2, for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. Year 2 Assets Purchase Date Basis Van June 15, Y2 $ 18,000 Pinball machine (7-year) July 1, Y2 4,000 Customer list April 30, Y2 10,000 Assume that eSys Answers does not claim any $179 expense or bonus depreciation. (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) 1 2 Form 4562 Page 1 and 2. Form 4562 OMB No. 1545-0172 Depreciation and Amortization (Including Information on Listed Property) Attach to your tax return. Go to www.irs.gov/Form4562 for instructions and the latest information. Business or activity to which this form relates 2019 Department of the Treasury Internal Revenue Service (99) Name(s) shown on return Attachment Sequence No. 179 Identifying number(XXX-XX-XXXX) Part1 Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 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. If zero or less, enter-O- 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero less, enter-O-. If married filing separately, see instructions 6 (a) Description of property (b) Cost (business use) (c) Elected cost 7 Listed property. Enter the amount from line 29 8 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 2018 Form 4562 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. see instructions 11 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 12 13 Carryover of disallowed deduction to 2020. Add lines 9 and 10, less line 12 13 Note: Do not use Part II or Part III 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 14 15 Property subject to section 168(1)(1) election 15 16 Other depreciation (including ACRS) 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2019 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Requmeumination (9) Depreciation deduction 25 yrs. Section B-Assets Placed in Service During 2019 Tax Year Using the General Depreciation System (c) Basis for (b) Month and year depreciation (a) Classification of property ( (business/investment placed in service (d) Recovery period (e) Convention (1) Method use only-See instructions) 19a 3-year property b 5-year property c 7-year property d 10-year property e 15-year property f 20-year property g 25-year property S/L h Residential rental MM S/L property MM S/L i Nonresidential real MM S/L property MM S/L Section C-Assets Placed in Service During 2019 Tax Year Using the Alternative Depreciation System 20a Class life S/L b 12-year S/L C 30-year 30 yrs MM S/L d 40-year MM S/L Part IV Summary (See instructions) 21 Listed property. Enter amount from line 28 21 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporationssee instructions 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2020 McGraw-Hill Education. 27.5 yrs. 27.5 yrs. 39 yrs. 12 yrs 40 yrs. Form 4562 (2019) ige No Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 246, columns (a) through (c) of Section A, all of Section B, and Section Cif applicable Section A-Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? Yes No 24b If "Yes" is the evidence written? Yes (c) (f) (a) Type of property (b) Date placed in service (e) Basis for depreciation Business/investment (d) Cost or other (9) (h) Depreciation Recovery (0) Elected section (list vehicles first) basis (business/investment use only) (mm/dd/yyyy) Method/Convention deduction 179 cost use percentage period 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: 27 Property used 50% or less in a qualified business use: S/L- S/L- S/L- 28 Add amounts in column (h). lines 25 through 27. Enter here and on line 21, page 1 28 29 Add amounts in column (1), line 26. Enter here and on line 7, page 1 29 Section B-Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other more than 5% owner," or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles 30 Total business/investment miles driven during the year (don't (a) Vehicle 1 (b) Vehicle 2 (c) Vehicle 3 (d) Vehicle 4 (e) Vehicle 5 (f) Vehicle 6 include commuting miles) 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven 33 Total miles driven during the year. Add lines 30 through 32 34 Was the vehicle available for personal use during Yes No Yes No Yes No Yes No Yes No Yes No off-duty hours? 35 Was the vehicle used primarily by a more than 5% owner 0 o or related person? 36 is another vehicle available for personal use? DO POD POH Persona No Do samo vem Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception completing Section B for vehicles used by employees who aren't more than 5% owners or related persons. see instructions Yes 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners. 39 Do you treat all use of vehicles by employees as personal use? 00000 0000 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? 41 Do you meet the requirements concerning qualified automobile demonstration use? See instructions. Note: If your answer to 37, 38, 39, 40, or 41 is "Yes," don't complete Section B for the covered vehicles. Part VI Amortization (c) Amortizable amount (d) Code section (e) Amortization period or percentage (f) Amortization for this year (b) Date (a) Description of costs amortization begins 42 Amortization of costs that begins during your 2019 tax year (see instructions). 43 Amortization of costs that began before your 2019 tax year. 44 Total. Add amounts in column (1). See the instructions for where to report. UYA THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2020 McGraw-Hill Education. Form 4562 (2018)