Burbank’s Maximum Cost Assignment | Top Universities

a. Assuming no bonus or §179 expense, what is Burbank’s maximum cost recovery deduction for this year?

b.Assuming Burbank would like to maximize its cost recovery deductions by claiming the bonus and §179 expense, which assets should Burbank immediately expense? (You may select more than one answer).

c. What is Burbank’s maximum cost recovery deduction this year assuming it elects §179 expense and claims bonus depreciation?

Burbank Corporation (calendar-year-end) acquired the following property this year: (Use MACRS Table 1, Table 2 and Exhibit 10-10.) (Round your answer to the nearest whole dollar amount.) Asset Used copier New computer equipment Furniture New delivery truck Luxury auto Total Placed in Service November 12 June 6 July 15 October 28 January 31 Basis $ 10, 200 16,400 34,400 21,400 72,400 $154,800 Burbank acquired the copier in a tax-deferred transaction when the shareholder contributed the copier to the business in exchange for stock. EXHIBIT 10-10 Automobile Depreciation Limits Recovery Year 1 Recovery Year 2 Recovery Year 3 Recovery Year 4 and after 2019 10,000** 16,000 9,600 5,760 Year Placed in Service 2018 2017 10,000* 3,160* 16,000 5.100 9,600 3,050 5,760 1,875 2016 3,160* 5.100 3,050 1.875 *As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed ($168(k) (2) (F)]. Get Accounting Homework Help Today.