1)A taxpayer purchased and placed into service a $1,690,000 piece of equipment. The equipment is 7-year property having a 14.29% applicable depreciation rate for the first year. The taxpayer is making a Section 179 election but is elected out of any bonus depreciation. Assume that the maximum Section 179 limit is $1,020,000 and the threshold is $2,550,000. Before considering any depreciation deduction, the taxpayer had $2,700,000 of taxable business income. What is the maximum amount of cost recovery deduction this year?
A.$241,501
B.$987,178
C.$1,020,000
D.$1,115,743
2) On August 1, Year 1, Sound Co. purchased and placed into service an office building costing $264,000, which includes $30,000 for the land. The MACRS depreciation schedule for 27.5-year property and 39-year property placed in service in the 8th month is listed below.
27.5-year property1.364%39-year property0.963%
What was Sound’s MACRS deduction for the office building in that year?
A.$2,253
B.$2,524
C.$3,192
D.$3,601