Apply Section 179 And Bonus Depreciation Practice Test

In 2024, Redtail Manufacturing Inc. (C corporation) places in service new 7-year MACRS machinery costing $2,000,000 (100% business use). Taxable income from the active conduct of the business (before Section 179) is $2,000,000. Redtail elects a $1,220,000 Section 179 deduction (the maximum statutory amount) and plans to claim bonus depreciation at 60% for 2024. How should the company apply bonus depreciation after utilizing Section 179?

In 2022, Greenfield Distribution (sole proprietorship) places in service qualifying new 7-year MACRS equipment costing $1,500,000 (100% business use). Taxable income from the active conduct of the business (before Section 179) is $1,200,000. Greenfield elects to expense $1,080,000 under Section 179 (the 2022 statutory limit) and then claim 100% bonus depreciation on the remainder. How should the company apply bonus depreciation after utilizing Section 179?