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, Year 1 October 30, Year 1 October 30, Year 1 October 30, Year 1 Basis $16,200 10,000 5,400 19,160 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 $12,160, 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, Year 2, for $27,000 and spent $4,200 getting it ready to put into service. The pinball machine cost $5,200 and was placed in service on July 1, Year 2. Van Year 2 Assets Pinball machine (7-year) Customer list Purchase Date June 15, Year 2 July 1, Year 2 April 30, Year 2 Basis $ 31,200 5,200 12,160 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.) . Complete eSys Answers's Form 4562 for Y1. Input all values as positive numbers. Use 2021 tax rules regardless of year on tax form. Assets acquired during Year 1 has to be entered under Section B part of Form 4562, page 1. Do not skip rows when entering Amortization of cost under line item 42 of Form 4562.) Form 4562 PG Form 4562 PG 1 2 Form 4562 Page 1 and 2. Form 4562 Depreciation and Amortization OMR No. 1545-0172 G < Prev 2 of 2 Next > Form 4562 Page 1 and 2. Form 4562 Department of the Treasury Internal Revenue Service (99) Name(s) shown on return 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 OMB No. 1545-0172 2020 Attachment Sequence No. 179 Identifying number(xxx-xx-xxxx) Part I 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) 1 2 Total Cost of section 179 property placed in service (see instructions) 2 6 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 -0- 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing separately, see instructions (a) Description of property 3 4 0 5 0 (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 2019 Form 4562 7 11 Business income limitation. Enter the smaller of business income (not less than zero) 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 8 0 9 0 10 0 11 12 13 Note: Part II Do not use Part II or Part III below for listed property. Instead, use Part V. 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 15 Property subject to section 168(f)(1) election 14 15 Required information 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 Section B-Assets Placed in Service During 2020 Tax Year Using the General Depreciation System (c) Basis for depreciation (a) Classification of property (b) Month and year placed in service (business/investment (d) Recovery period (e) Convention (f) Method (g) Depreciation deduction 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 h Residential rental property i Nonresidential 25 years S/L 27.5 years MM S/L 27.5 years MM S/L 39 years MM S/L MM S/L real property Section C-Assets Placed in Service During 2020 Tax Year Using the Alternative Depreciation System S/L 20a Class life 12 years S/L b 12-year c 30-year 30 years MM S/L d 40-year 40 years MM S/L Part IV Summary (See instructions) 21 Listed property. Enter amount from line 28 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 corporations-see instructions 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 21 22 0