Reid Acquired Two Assets This Year: Computer Equipment (5-Year Property)

question 76

Short Answer

Reid acquired two assets this year: computer equipment (5-year property) acquired on August 6th with a basis of $500,000 and machinery (7-year property) on November 9th with a basis of $500,000. Assume that Reid has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (but not bonus expensing). Assume the 2013 §179 limits are extended to 2014.

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Definitions:

Shared Interests

Common goals or concerns that unite individuals or groups, often leading to collaboration or collective action.

Industrial Union

Labor union whose members are linked by their work in a particular industry.

Craft Union

A labor union of workers who practice the same craft or trade.

Apprenticeships

Training programs that combine on-the-job training with classroom instruction, typically in a trade or profession, under the guidance of skilled workers.