Kondar Corporation a calendaryear taxpayer spent 2090000 to

Kondar Corporation (a calendar-year taxpayer) spent $2,090,000 to purchase used machinery in February 2017.

a. What is the maximum that Kondar can elect to expense under Section 179?

b. What is the basis for calculating regular MACRS depreciation on this machinery if the maximum Section 179 deduction is elected?

c. What us Kondar\'s total depreciation deduction for 2017?

d. What is Kondar\'s depreciation deduction of this machinery for 2018?

Solution

Answer:a $410,000 ($500,000 less the excess of $2,090,000 over $2,000,000).

Answer:b $1,680,000 ($2,090,000 - $410,000).

Answer:c $6,50,072 [($1,680,000 x 14.29%) + $410,000]. The machinery is 7-year property. (Note that used property is not eligible for bonus depreciation.)

Answer:d  Kondar\'s depreciation deduction for this machinery for 2018 is $4,11,432(16,80,000*24.49%).