[Biff-1955-Tannen]

Sally Markey, who owns a heavy construction company, decided to spend some of her $2,000,000 2015 profit on a heavy-duty diesel truck costing $111,000 for her business. In order to lower her income taxes for the year, she decided to take the maximum Section 179 deduction plus the MACRS depreciation for 7-year property. The ceiling for Section 179 in 2015 is $25,000. No other capital assets were purchased during 2015. What is the total deduction for the truck in 2015?

Sally Markey took the largest Section 179 deduction available in 2015, $25,000. This reduced the truck tax basis.

Equipment purchase $111,000

2015 Section 179 25,000

1st-year depreciation [($111,000 – $25,000) x 0.1429] 12,289

Total expense for 2015 ($25,000 + $12,289) 37,289

That .1429 factor is only using straight-line (1/7), not 2/7. Why is this?

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Credit Revenue]

Man I don't understand the difference 100%. What I have implied from the MCQ's is that when you take the section 179 exemption you use SL for the excess. When you don't take 179 you use DDB, but I am not 100% confident in that answer.

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[monikernc]

it is the half year convention that is applied to new equipment purchased in the year, i believe. use the rates from the tables to do MACRS. it is not due to the Sect 179 expense that is taken. if dates had been given then you would take into consideration whether 40% of all new purchases of tangible personal property had been acquired in the last quarter.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Credit Revenue]

You don't use double declining because it is a short tax year? When would you use the DDB? I am asking because I have read the Becker book and still not sure of the rule. Thank you for your help.

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Credit Revenue]

The book says MACRS is a DDB method, but then you look at the rates used in year one and it's straight line. One question from NINJA used DDB once as well (the MACRS rate times 2).

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[monikernc]

you use half year in the first year and last year.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Credit Revenue]

Ok – that makes sense. Thank you

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Biff-1955-Tannen]

Thanks monikernc I think you're right.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[monikernc]

biff, i didn't see it was you asking. how was far? when will you take reg? you are zippin' through these.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Biff-1955-Tannen]

FAR was a catastrophe. As far as knowing the content it wasn't too bad. The sims really screwed me though. On 2 sims, (2 parts on 1 sim, and 1 part on the other sim), I couldn't change my journal entry. So for example it gives me 4 lines to do the journal entry. I initially make an entry using 4 accounts, and later realize that I only need 3. I try to change that 4th account to a blank, and I don't have an option to take the account off, only to change the account title.
Then on a third sim, (without going into what kind of schedule), I have to fill out a schedule. I'm perfectly able to get the end result that it wanted from the schedule, but it gives me zero direction on how it wants the schedule filled out. Does it want me to put 0 for the “value per unit” if there are no units, or does it want me to put the value per unit regardless of if there are units.

I'm taking REG on the 14th. I wish I could not look at my score until after REG since I know thats really gonna throw me off seeing that I failed FAR, but that's pretty much impossible since I'll get an email with the failing score. And I can't not check my email since I start work on the 16th, so I don't want to miss an important email from them.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Credit Revenue]

SIM's may have been my downfall as well Biff. Hoping I did enough. A couple of my sims were almost unreal. Hoping one of them was a throw away. Are SIMS weighted based from a difficulty scale like the multiple choice questions?

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[monikernc]

biff, i squeaked by far without cracking a book. you studied. i took far because my nts was expiring and remember feeling good through the mcq's. got to sims and yikes!! did what i could and left. i never tried or expected to pass but wasn't going to waste my ticket so i went for the ride. shocked when i passed and yikes again, tick tock, the 18 month click was on.

you studied. i bet even with partial credit you will be fine. 75 is all you need and if mcq's felt good you may be golden. hang in. don't look. farwars restrained himself and avoided his aud score till he took bec.

reg is a piece of work. too much like bec. i still have bizlaw to do in my first pass and then 3 weeks for full review.

good luck.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Author]

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