Question

Required information The following information applies to the questions displayed below. AMP Corporation (calendar-year end) has 2017 taxable income of $900000 for purposes of computing the $179 expense During 2017, AMP acquired the following assets:(Use MACRS Tablet Table 2 Table3 Table 4 and Table 5) February 16 395,800 Total . What is the maximum amount of $179 expense AMP may deduct for 2017

Answer 1

Answer :

a. The maximum amount of §179 expense AMP may deduct for 2017 is $ 510,000.

Working Notes :

Description	Amount	Explanation
(1). Property placed in service in 2017	$1,745,000	Total §179 qualified property
(2) Threshold for §179 phase-out	$(2,030,000)	2017 amount [§179(b)(2)]
(3) Phase-out of maximum §179 expense	- $ 0 -	(1) – (2) (permanently disallowed), not less than $ 0
(4) Maximum §179 expense before phase-out	$ 510,000	2017 amount [§179(b)(1)]
(5) Phase-out of maximum §179 expense	- $ 0 -	From (3)
Maximum § 178 expense after phase - out	$ 510,000	(4) - (5)

Note: Property placed in service in 2017 for AMP only includes machinery and computer equipment i.e, ($1,350,000 + $ 395,000) = $ 1,745,000.

Office building is not treated as 179 qualified property.