On January 20, 2022, Javier Sanchez purchased and placed in service a new 7-year classasset costing $419,600 for use in his landscaping business, which he operates as a singlemember LLC (Sanchez Landscaping LLC).Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 ofthis asset and then use regular MACRS to cost recover the remaining cost. During 2022, hisbusiness generated a net income of $503,520 before any § 179 immediate expense election.If required round your intermediate computations and final answers to the nearestdollar. Click here to access the depreciation table to use for this problem.a. Determine the cost recovery deductions (including first-year additional depreciation) thatJavier Sanchez can claim with respect to this asset in 2022 and 2023.Total cost recovery deduction in 2022: $Total cost recovery deduction in 2023:b. Complete Javier's Form 4562 (page 1) for 2022.Note: For 2022, the maximum § 179 is $1,080,000 and the threshold amount is $2,700,000.If an amount is zero, enter "0". Enter amounts as positive numbers.Form 4562Department of theTreasury InternalRevenue ServiceName(s) shown on returnJavier Sanchez12Part I Election To Expense Certain Property Under Section 179Note: If you have any listed property, complete Part V before you complete Part I.Maximum amount (see instructions).345Depreciation and Amortization(Including Information on Listed Property)2022AttachmentAttach to your tax return.Go to www.irs.gov/Form4562 for instructions and the latest Sequenceinformation.No. 1796Business or activity to which this form relatesSanchez Landscaping, LLCTotal cost of section 179 property placed in service (see instructions).Threshold cost of section 179 property before reduction in limitation (seeinstructions)Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . .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(b) Cost(business useonly)(c) Elected costIdentifyingnumber123-45-678912OMB No.1545-017235 789101112131516Landscaping equipmentListed property. Enter the amount from line 29 . . . . . .17PartIIITotal elected cost of section 179 property. Add amounts in column (c), lines 6and 7.Tentative deduction. Enter the smaller of line 5 or line 8Carryover of disallowed deduction from line 13 of your 2021 Form 456214 Special depreciation allowance for qualified property (other than listed property)placed in service during the tax year (see instructions)Business income limitation. Enter the smaller of business income (not less thanzero) or line 5 (see instructions) . . . . . .Section 179 expense deduction. Add lines 9 and 10, but don't enter more thanline 11.....Carryover of disallowed deduction to 2023. Add lines 9and 10, less line 12. . . .Note: Don't use Part II or Part III below for listed property. Instead, use Part V.Part Special Depreciation Allowance and Other Depreciation (Don't include listed property.See instructions.)IIProperty subject to section 168(f)(1) election7Other depreciation (including ACRS)MACRS Depreciation (Don't include listed property. See instructions.)13Section AMACRS deductions for assets placed in service in tax years beginning before 2022.18 If you are electing to group any assets placed in service during the tax year intoone or more general asset accounts, check here(a) Classificationof property(b)Month(c) Basis foranddepreciation(d)year (business/investment Recoveryplaced use only-see periodininstructions)8(e)Convention910111214Section B-Assets Placed in Service During 2022 Tax Year Using the General DepreciationSystem151617(f) Method(g)Depreciationdeduction

On January 20, 2022, Javier Sanchez purchased and placed in service a new 7-year class asset costing $419,600 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2022, his business generated a net income of $503,520 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2022 and 2023. Total cost recovery deduction in 2022: $ Total cost recovery deduction in 2023:

On January 20, 2022, Javier Sanchez purchased and placed in service a new 7-year class asset costing $419,600 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2022, his business generated a net income of $503,520 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2022 and 2023. Total cost recovery deduction in 2022: $ Total cost recovery deduction in 2023:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lars acquired a new network system on June 5, 2023 (five-year class property), for $69,000. She expects taxable income from the business will always be about $215,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2023 for $430,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2023.
During 2021, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business: Manufacturing equipment (7 year) Office furniture Office computer Item Passenger automobile (used 85 percent for business) Warehouse Date Acquired June 2 September 15 November 18 May 31 July 23 Building Land Cost $ 50,000 8,000 2,000 55,000 170,000 135,000 Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense and elects out of bonus depreciation. Use Form 4562 to report Pepe's depreciation expense for 2021.
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On June 5, 2022, Leo purchased and placed in service a new car that cost $75,000. The business use percentage for the car is always 100%. Leo does not elect § 179 expensing, and does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation table to use for this problem. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? Half-year b. Is the automobile considered "listed property"? Yes c. Leo's cost recovery deduction in 2022 is $ 10,200 X and for 2023 is $ 16,400 X.
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