Lori, who is single, purchased 5-year class property for$200,000 and 7-year class property for $410,000 on May 20, 2017.Lori expects the taxable income derived from her business (withoutregard to the amount expensed under § 179) to be about $800,000.Lori wants to elect immediate § 179 expensing, but she doesn't knowwhich asset she should expense under § 179. She does not claim anyavailable additional first-year depreciation. Click here to accessExhibit 8.1 and the depreciation table to use for this problem. Ifan amount is zero, enter "0". a. Determine Lori's total costrecovery deduction if the § 179 expense is first taken with respectto the 5-year class asset. 5-year class property Immediate expensededuction under § 179 $ Regular MACRS 7-year class propertyImmediate expense deduction under § 179 $ Regular MACRS Totaldeduction $ Feedback b. Determine Lori's total cost recoverydeduction if the § 179 expense is first taken with respect to the7-year class asset. 7-year class property Immediate expensededuction under § 179 $ Regular MACRS 5-year class propertyImmediate expense deduction under § 179 $ Regular MACRS Totaldeduction $ Feedback Correct c. If § 179 expense is first allocatedto the seven-year class property, the deduction for the year wouldbe $ larger. Feedback Correct For parts d. and e. Assume a 6%discount rate The present value factors for a 6% discount rate areas follows: Year 1: 1.000, Year 2: 0.9434; Year 3: 0.8900, Year 4:0.8396, year 5: 0.7921, Year 6: 0.7473, Year 7: 0.7050, Year 8:0.6651. Hint: Set up two analysis - on to find present value of taxsaving with Section 179, and one without Section 179. Then comparethem. If required, round computations to the nearest dollar.
d. Assume that Lori is in the 25% marginal tax bracketand that she uses § 179 on the 7-year asset. The present value ofthe tax savings from the depreciation deductions for both assets $.Feedback Incorrect
e. Assume that Lori is in the 25% marginal tax bracketand that Lori decides not to use § 179 on either asset. The presentvalue of the tax savings generated by using the § 179 deduction onthe 7-year asset $.
pls help to solve part E
Lori, who is single, purchased 5-year class property for$200,000 and 7-year class property for $410,000 on May 20, 2017.Lori expects the taxable income derived from her business (withoutregard to the amount expensed under § 179) to be about $800,000.Lori wants to elect immediate § 179 expensing, but she doesn't knowwhich asset she should expense under § 179. She does not claim anyavailable additional first-year depreciation. Click here to accessExhibit 8.1 and the depreciation table to use for this problem. Ifan amount is zero, enter "0". a. Determine Lori's total costrecovery deduction if the § 179 expense is first taken with respectto the 5-year class asset. 5-year class property Immediate expensededuction under § 179 $ Regular MACRS 7-year class propertyImmediate expense deduction under § 179 $ Regular MACRS Totaldeduction $ Feedback b. Determine Lori's total cost recoverydeduction if the § 179 expense is first taken with respect to the7-year class asset. 7-year class property Immediate expensededuction under § 179 $ Regular MACRS 5-year class propertyImmediate expense deduction under § 179 $ Regular MACRS Totaldeduction $ Feedback Correct c. If § 179 expense is first allocatedto the seven-year class property, the deduction for the year wouldbe $ larger. Feedback Correct For parts d. and e. Assume a 6%discount rate The present value factors for a 6% discount rate areas follows: Year 1: 1.000, Year 2: 0.9434; Year 3: 0.8900, Year 4:0.8396, year 5: 0.7921, Year 6: 0.7473, Year 7: 0.7050, Year 8:0.6651. Hint: Set up two analysis - on to find present value of taxsaving with Section 179, and one without Section 179. Then comparethem. If required, round computations to the nearest dollar.
d. Assume that Lori is in the 25% marginal tax bracketand that she uses § 179 on the 7-year asset. The present value ofthe tax savings from the depreciation deductions for both assets $.Feedback Incorrect
e. Assume that Lori is in the 25% marginal tax bracketand that Lori decides not to use § 179 on either asset. The presentvalue of the tax savings generated by using the § 179 deduction onthe 7-year asset $.
pls help to solve part E
