Question 1) McKenzie placed in service qualifying equipment (7-year MACRS class) for his business that cost $212,000 in 2023. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction.
If an amount is zero, enter "0".
a. Calculate McKenzie's § 179 expense deduction for 2023 and any carryover to 2024.
§ 179 expense deduction for 2023: $fill in the blank 1
§ 179 carryover to 2024: $fill in the blank 2
b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.3.
Additional first-year depreciation for 2023: $fill in the blank 3
MACRS cost recovery for 2023: $fill in the blank 4
Total cost recovery for 2023: $fill in the blank 5
Question 2) Diana acquires and places in service a 5-year class asset, costing $65,000, on December 19, 2023. Diana does not elect immediate expensing under § 179. She elects additional first-year depreciation.
Click here to access the depreciation table to use for this problem.
Diana's total cost recovery deduction for the asset is $fill in the blank 1 for 2023.