Assume that Sivart Corporation has 2022 taxable income of $1,750,000 for purposes of computing the §179 expense and acquired several assets during the year. Assume the delivery truck does not qualify for bonus depreciation. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Placed in Service Basis Machinery June 12 $ 1,440,000 Computer equipment February 10 70,000 Delivery Truck—used August 21 93,000 Furniture April 2 310,000 Total $ 1,913,000 a. What is the maximum amount of §179 expense Sivart may deduct for 2022?
Assume that Sivart Corporation has 2022 taxable income of $1,750,000 for purposes of computing the §179 expense and acquired several assets during the year. Assume the delivery truck does not qualify for bonus depreciation. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
| Asset | Placed in Service | Basis |
|---|---|---|
| Machinery | June 12 | $ 1,440,000 |
| Computer equipment | February 10 | 70,000 |
| Delivery Truck—used | August 21 | 93,000 |
| Furniture | April 2 | 310,000 |
| Total | $ 1,913,000 |
a. What is the maximum amount of §179 expense Sivart may deduct for 2022?
Section 179 of Internal revenue Code:
Businesses are entitled to immediately deduct costs associated with operating depreciable assets like machinery, cars, and software under IRC Section 179. Instead of capitalizing an asset and depreciating it over time in subsequent tax years, this enables firms to reduce their tax bill for the current year. Businesses may deduct the whole purchase price of any eligible piece of equipment or software in the year that it was bought or financed according to Section 179 of the IRS Tax Code.
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