Crouch LLC placed in service on May 19,2013 machinery and equipment (7-year property) with a basis of $2,200,000.Assume that Crouch has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing) :
A)$314,380.
B)$440,000.
C)$571,510.
D)$742,930.
E)None of thesE.The $500,000 §179 expense is reduced to $300,000 because of the property placed in service limitation ($2,200,000 - $2,000,000 threshold) .The half year convention applies.The expense is $571,510 which is depreciation of $1,900,000 × .1429 = $271,510 plus $300,000 of §179 expense.

Question

Quizplus · Accepted Answer

The maximum depreciation expense would include the §179 expensing, which is reduced to $300,000 because of the property placed in service limitation. The half year convention would apply, and the total expense would be depreciation of $1,900,000 x 0.1429 = $271,510 plus the $300,000 of §179 expense, resulting in a total expense of $571,510.

Crouch LLC Placed in Service on May 19,2013 Machinery and Equipment