Boxer LLC Has Acquired Various Types of Assets Recently Used

question 8

Short Answer

Boxer LLC has acquired various types of assets recently used 100% in its trade or business. Below is a list of assets acquired during 2015 and 2016:
Boxer did not elect §179 expense and elected out of bonus depreciation in 2015, but would like to elect §179 expense for 2016 (assume that taxable income is sufficient). Calculate Boxer's maximum depreciation expense for 2016, rounded to the nearest whole number (ignore bonus depreciation for 2016). If necessary, use the 2015 luxury automobile limitation amount for 2016 and assume that the 2015 §179 limits are identical to 2016.
$$\begin{array} { | l | r | l | l | } \hline \text { Asset } & \begin{array} { r } \text { Cost } \\\text { Basis }\end{array} & \text { Comrention } & \begin{array} { l } \text { Date Placed in } \\\text { Senrice }\end{array} \\\hline \text { Machinery } & 25,000 & \text { Half year } & \begin{array} { l } \text { January 24, } \\2015\end{array} \\\hline \text { Warehouse } & 800,000 & \text { Mid month } & \text { August 1, 2015 } \\\hline \text { Furniture } & 100,000 & & \text { October 5, 2016 } \\\hline \begin{array} { l } \text { Computer } \\\text { equipment }\end{array} & 65,000 & & \text { October 10, 2016 } \\\hline \begin{array} { l } \text { Office } \\\text { equipment }\end{array} & 34,000 & & \begin{array} { l } \text { September 28, } \\2016\end{array} \\\hline \text { Automobile } & 35,000 & & \text { July 15, 2016 } \\\hline \text { Office building } & 800,000 & & \begin{array} { l } \text { September 24, } \\2016\end{array} \\\hline\end{array}$$

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Definitions:

Return on Investment

A measure used to evaluate the efficiency of an investment, calculated by dividing the profit gained on an investment by the cost of the investment.

Indirect Expense

Costs incurred that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Depreciation Expense

Depreciation expense is the allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, decay, or obsolescence.

Department Store

A retail establishment offering a wide range of consumer goods in different product categories known as "departments."