Question

1 Approved Answer

Posted on Jul 16, 2024

! Required information [The following Information applies to the questions displayed below.] Assume that Timberline Corporation has 2020 taxable income of $246.000 for purposes of

! Required information [The following Information applies to the questions displayed below.] Assume that Timberline Corporation has 2020 taxable income of $246.000 for purposes of computing the $179 expense. It acquired the following assets in 2020 (Use MACRS Table Table 2. Tables Table 4 and Table 5) Asset Furniture (7-year) Computer equipment (5-year) Copier (5-year) Machinery (7-year) Total Purchase Date December 1 February 28 Buly 15 May 22 Basis $ 456,000 96,000 36,000 486,000 $ 1,074,000 Required: a-1. What is the maximum amount of $179 expense Timberline may deduct for 2020? a-2. What is Timberline's $179 carryforward to 2021, if any? a-1 $ 246,000 Maximum $179 expense Maximum 5179 carryforward a-2 b. What would Timberline's maximum depreciation deduction be for 2020 assuming no bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Maximum Depreciation Deduction (including $179 expense) c. What would Timberline's maximum depreciation deduction be for 2020 if the machinery cost $3,560,000 instead of $486,000 and assuming no bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Maximum Depreciation deduction including 5179 pense) Table 1 MACRS Half-Year Convention 20-Year 3.750% 7.219 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 33.33% 20.00% 14.29% 10.00% 5.00% 44.45 32.00 24.49 18.00 9.50 14.81 19.20 17.49 14.40 8.55 7.41 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 6.677 6.177 5.713 5.285 4.888 4.522 4.462 Year 7 Year 8 Year 9 4.461 Year 10 Year 11 4.462 4.461 Year 12 Year 13 Year 14 4.462 5.90 4.461 Year 15 5.91 4.462 2.95 4.461 Year 16 Year 17 4.462 4.461 4.462 Year 18 Year 19 Year 20 Year 21 4.461 2.231 Depreciation Rate for Recovery Period S-Year 7-Year Year 1 35.00% 25.000 Year 2 26.00 21.43 Year 3 13.60 15.31 Year 4 11.01 10.93 Years 11.01 Year 6 1.38 8.74 Year 8.75 Year 1.09 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year! 25.00% 17.85% Year 2 30.00 23.47 Year 16.76 Year 4 11.37 11.97 Year 5 11.37 8.87 Year 6 4.26 3.67 Year 7 8.7 Years 3.34 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year! 13.00% 10.71% Year 2 14.00 25.51 Year 3 20.40 1822 Year 4 12:24 13.02 Year 5 11.30 9.30 Year 6 7/06 8.85 Year 7 NG Year 5.53 TABLE 20 MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period S-Year 7-Year 3.57% 27.55 19.68 14.06 Year 1 Year 2 Year 3 Year 4 Years Year 6 Year 2 Year 38.00 22.80 13.68 10.94 10.04 8.73 9.58 & 73 7.64 Done ch10_table3.htm TABLE 3 Residential Rental Property Mid-Month Convention Straight Line27.5 Years Month Property Placed in Service Month 1 3.485% 1.667% Month 3 Month 7 Month 9 Month 4 2.576% 3.636 3.637 3.636 3.637 3.636 Month 6 1.970% 3.636 3.637 3.636 Month 8 1.364% 3.636 3.636 3.637 1.061% 3.636 3.636 Month 5 2.273% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.636 Year! Year 2-9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Month 2 3.18296 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 2.879% 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 Month 10 Month 11 Month 12 0.758% 0.455% 0.152% 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3,637 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.637 3.636 3.636 3.636 3.636 3.637 3.637 3.67 022 2017 1636 Done ch10_table3.htm 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.637 3.636 3.637 3.637 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 3.637 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.6.36 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1.364 Year 22 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.637 3,637 Year 23 Year 24 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 1061 3.637 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.637 3.637 3.636 3.637 3.637 3637 3.637 3.637 3.636 3.637 3.636 3.182 Year 25 Year 26 Year 27 Year 28 Year 29 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 0.455 3.636 3.636 3.636 2.273 3.636 3.485 3.636 3.637 3.636 0.758 3.637 3.636 1.97 2.576 2.879 3.636 0.152 1.667 Done ch10_table4.htm TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line 31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Month 10 Months 1.984% 3.175 3.175 3.174 3.175 3.174 Month 6 1.720% 3.175 3.174 3.175 3.174 3.175 Month 9 0926% 3.175 3.175 3.174 3.175 3.174 Month 12 0.132 3.175 3.175 3.193 1174 1.175 2124 Month 1 3042% 3.125 3.175 3.174 3.175 3.194 2.175 1.174 1.175 1.174 1175 3.174 2.125 3.174 2175 3.174 Month 2 2.778% 3.175 3.174 3.175 3.174 3.175 2.114 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.114 Month 4 2.249% 3.175 1174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Month 3 2.5139 3.175 3.175 3.174 3.175 3174 1.175 3.174 3.175 1174 3.175 1174 3.175 1174 1175 1.174 Year 1 Year 2-7 Year Year 9 Year 10 Year 11 Year 13 Year 13 Year 14 Year 15 Year 16 Year 19 Year 18 Year 19 Year 20 Year 21 3.175 3.174 Month 11 0.397% 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 III Month 14589 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 2175 Month 1.190% 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 1.175 3.174 1.175 3174 1.115 3.174 3.175 3.174 2174 3.175 3.175 0.66196 1.175 3.175 3.195 3.174 3.175 1174 3.175 3.174 1.175 3.174 3.175 3.174 1.175 2.174 2.178 3.175 3.174 3.175 1174 1.175 3.174 3.175 3.175 3.174 3.173 2174 1.175 1174 1.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 1.174 3.175 3.174 3.194 3.175 3.174 2.134 1175 1.174 1195 3.174 3.175 3.114 3175 ch10_table4.htm 3015 31175 3.174 2016 1175 1174 38174 3.175 3.174 3.175 3.174 3.175 3.174 1175 3.174 3.175 33174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 35 3.174 3.175 3.174 3.175 Done Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 3174 3.175 2.174 3.175 3.174 1.174 3.175 3.174 35 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 1.175 3.175 2.174 2.174 3.175 1.174 3.175 3.175 3.175 1.175 3175 1.174 1.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 1.173 1.114 3175 1174 1.720 1174 3.175 3.174 3.175 3.174 3.175 3.174 3.375 3.174 3.175 3.174 3.175 3.174 3.175 1.174 1.174 3.175 1174 3.175 3.174 3.175 3.175 331 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 3.175 3.174 3.175 1.174 3.175 1.174 3.175 3.174 3.174 3.175 3.174 3.174 1.175 1.174 3.175 1174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 2174 3.175 3.174 3.175 3.174 1.175 1174 3175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.194 3.175 3.174 3.175 1.175 2.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 104 3.174 3.175 3.174 3.175 1.174 3.175 3.174 3.175 2513 2.174 1.175 Year 26 Year 27 Year 2N Year 29 Vear 30 Year 1 Year 13 Year 33 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 0.001 1.175 1.174 3.174 1.175 2.194 1.175 1.174 3.175 3.174 3.175 1.174 2.15 1.174 2175 3.174 1.194 1175 1.175 1.174 1.175 1.173 1.174 1.175 1.174 1114 1174 2249 27 3042 3.175 0.132 0.197 0.926 1.455 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Months 1.00% Year Year 2-19 Month 1 2.4619 2.564 0.107 Month 2 2247% 2.564 0.321 Month 3 20334 2.564 0.535 Month 4 1.819 2.564 0.749 Month 6 13919 2.564 1172 Month 7 1.177% 2564 1.391 Months 0961% 2564 1.005 Month 0.740% 2.564 1819 Month 10 0.53% 2564 2033 Month 11 0.321% 2564 2.247 Month 12 0.1074 2.564 2.461 Year 40 0.963