Eva purchased office equipment (7-year property) for use in her business. She paid $12,600 for the equipment on July 1, 2014. Eva did not purchase any other property during the year. For 2014, her business had net income of $6,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Eva can elect to expense in 2014 under Section 179?
b.What is the total depreciation (regular depreciation and the amount allowed as a 2014 deduction under the election to expense) on the office equipment for 2014, assuming Eva uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.Assuming that Eva elected to expense the equipment in 2014 and that her business has net income in 2015 of $200,000, before depreciation and before considering the election to expense, what is Eva's total depreciation deduction (regular depreciation and the amount allowed under the election to expense) for the equipment for 2015?

Question

Eva purchased office equipment (7-year property) for use in her business. She paid $12,600 for the equipment on July 1, 2014. Eva did not purchase any other property during the year. For 2014, her business had net income of $6,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Eva can elect to expense in 2014 under Section 179?
b.​​​What is the total depreciation (regular depreciation and the amount allowed as a 2014 deduction under the election to expense) on the office equipment for 2014, assuming Eva uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.​​​Assuming that Eva elected to expense the equipment in 2014 and that her business has net income in 2015 of $200,000, before depreciation and before considering the election to expense, what is Eva's total depreciation deduction (regular depreciation and the amount allowed under the election to expense) for the equipment for 2015?

Quizplus · Accepted Answer

The Answer of Eva purchased office equipment (7-year property) for use in her business. She paid $12,600 for the equipment on July 1, 2014. Eva did not purchase any other property during the year. For 2014, her business had net income of $6,000, before depreciation and before considering the election to expense.
a.What is the maximum amount that Eva can elect to expense in 2014 under Section 179?
b.​​​What is the total depreciation (regular depreciation and the amount allowed as a 2014 deduction under the election to expense) on the office equipment for 2014, assuming Eva uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?
c.​​​Assuming that Eva elected to expense the equipment in 2014 and that her business has net income in 2015 of $200,000, before depreciation and before considering the election to expense, what is Eva's total depreciation deduction (regular depreciation and the amount allowed under the election to expense) for the equipment for 2015?

Eva Purchased Office Equipment (7-Year Property) for Use in Her