Determine the cost recovery deductions

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Reference no: EM133926364

Question: On April 5, 2024, Javier Sanchez purchased and placed in service a new 7-year class asset costing $448,400 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC).

Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2024, his business generated a net income of $538,080 before any § 179 immediate expense election.

If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. Get expert-level assistance in any subject with our assignment help services.

a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2024 and 2025.
Total cost recovery deduction in 2024: $fill in the blank 1
Total cost recovery deduction in 2025: $fill in the blank 2

b. Complete Javier's Form 4562 (page 1) for 2024.

Note: For 2024, the maximum § 179 is $1,220,000 and the threshold amount is $3,050,000. If an amount is zero, enter "0". Enter amounts as positive numbers.

Reference no: EM133926364

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