for sec 179 you depreciate the amount that you can't expense immediately (everything over $500k).
after you expense the $500k, you can immediately depreciate 50% of the balance as bonus depreciation
after that, you can take normal depreciation on that balance
so say you buy a 5-yr asset for $610,000
sec 179 expense is $500k
leaving a depreciable base of $110,000
bonus depreciation (50% of the remaining depreciable base) is $55,000
now we are left with a depreciable base of $55,000, which you will depreciate normally under MACRS
so, normal depreciation for a 5-yr MACRS asset is 20% in year 1, so $11,000 will be normal depreciation
sec 179 expense + bonus depreciation + normal depreciation = total depreciation for the first year
$500k + $55k + $11k = $566 depreciation taken in Y1
and then remember sec 179 is phased out dollar-for-dollar $2m-$2.5m
is this all correct? just did a MCQ like that, wanting to make sure i got it down
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