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Lenter LLC placed in service on April 29, 2015 machinery and equipment (7-year property) with a basis of $600,000. Assume that Lenter has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including section 179 expensing (but ignoring bonus expensing). Assume that the 2014 §179 limits are extended to 2015: A. $85,740 B. $120,000 C. $514,290 D. $585,740 E. None of these

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Answer:

C

Explanation:

Firstly, we consider if the expenses is limited or not limited within the framework of the section 179.

Considering the framework, it can be seen that the expenses of $500,000 is not limited under section 179

The maximum depreciation expenses can be calculated as follows;

(600,000-500,000) * 0.1429 = 14,290

We then add the expenses of section 179 = 500,000

The value of the maximum depreciation expenses is thus 500,000 + 14,290 = 514,290