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Question: Dain’s Diamond Bit Drilling purchased the

Dain’s Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any §179 expense (assume no bonus depreciation).
Dain’s Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any §179 expense (assume no bonus depreciation). 
a. What is the maximum amount of §179 expense Dain may deduct for the year?
b. What is Dain’s maximum depreciation expense for the year (including §179 expense)?
c. If the January drill bits’ original basis was $2,375,000, what is the maximum amount of §179 expense Dain may deduct for the year?
d. If the January drill bits’ basis was $2,495,000, what is the maximum amount of §179 expense Dain may deduct for the year?
a. What is the maximum amount of §179 expense Dain may deduct for the year? b. What is Dain’s maximum depreciation expense for the year (including §179 expense)? c. If the January drill bits’ original basis was $2,375,000, what is the maximum amount of §179 expense Dain may deduct for the year? d. If the January drill bits’ basis was $2,495,000, what is the maximum amount of §179 expense Dain may deduct for the year?





Transcribed Image Text:

Purchase Original Asset Date Basis Drill Bits (5-year) Drill Bits (5-year) Commercial Building January 25 July 25 April 22 $90,000 95,000 220,000


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