Lanyard purchased office equipment (7-year property) for use in his business. He paid $100,000 for the equipment on July 1, 2016. Lanyard did not purchase any other property during the year. For 2016, his business had net income of $350,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Lanyard can deduct in 2016 under the election to expense?
b.

What is the total depreciation (regular depreciation and the amount allowed under the election to expense) on the office equipment for 2016, assuming Lanyard uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.What is Lanyard's total depreciation deduction for 2017 on the 2016 purchase of equipment?

Question

Lanyard purchased office equipment (7-year property) for use in his business. He paid $100,000 for the equipment on July 1, 2016. Lanyard did not purchase any other property during the year. For 2016, his business had net income of $350,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Lanyard can deduct in 2016 under the election to expense?
b.​
​
What is the total depreciation (regular depreciation and the amount allowed under the election to expense) on the office equipment for 2016, assuming Lanyard uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.What is Lanyard's total depreciation deduction for 2017 on the 2016 purchase of equipment?

Quizplus · Accepted Answer

The Answer of Lanyard purchased office equipment (7-year property) for use in his business. He paid $100,000 for the equipment on July 1, 2016. Lanyard did not purchase any other property during the year. For 2016, his business had net income of $350,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Lanyard can deduct in 2016 under the election to expense?
b.​
​
What is the total depreciation (regular depreciation and the amount allowed under the election to expense) on the office equipment for 2016, assuming Lanyard uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.What is Lanyard's total depreciation deduction for 2017 on the 2016 purchase of equipment?

Lanyard Purchased Office Equipment (7-Year Property) for Use in His