Question

Michael Sima, a sole proprietor craftsman, purchased an amount of equipment in the current year that exceeded the maximum allowable § 179 depreciation election limit by $20,000. Sima's total purchases of property placed in service in the current year did not exceed the limit imposed by § 179. All of the property (including the equipment) was purchased in November of the current year, and Sima elected to depreciate the maximum amount of equipment under § 179. Sima had bottom-line Schedule C income of $50,000 in the current year. Which method may Sima use to depreciate the remaining equipment in the current year?

Answer 1

The answer is "MACRS mid-quarter convention for personal property".

Step-by-step explanation:

The corporation which obtains capital assets in a period increased would consider it in the mid-quarter Standard as if they've purchased throughout the mid-year.

• It shall be enforced during the last two months of the consumer's tax period the total debt-capital base of MACRS products established.
• In operation amounts to even more than 40% of all MACRS properties put in service throughout the whole year.