Question - Dain's Diamond Bit Drilling purchased the following assets this year.
|
Asset
|
Purchase Date
|
Original Basis
|
|
Drill bits (5-year)
|
January 8
|
$90,500
|
|
Drill bits (5-year)
|
July 15
|
98,500
|
|
Commercial building
|
April 13
|
286,000
|
Assume its taxable income for the year was $64,250 before deducting any §179 expense (assume no bonus depreciation but assume that the 2014 §179 limits are extended to 2015). (Use MACRS Table 1,Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the maximum amount of §179 expense Dain may deduct for the year?
b. What is Dain's maximum depreciation expense for the year (including §179 expense)?
c. If the January drill bits' original basis was $2,396,000, what is the maximum amount of §179 expense for the year? Dain may deduct for the year? (Leave no answer blank. Enter zero if applicable.)
d. If the January drill bits' basis was $2,516,000, what is Dain's maximum §179 expense for the year?(Leave no answer blank. Enter zero if applicable.)