Jack owns and operates Puget Tours, a sightseeing company that provides boattours in Washington State for whale watchers. Jack purchases two boats for $ each in for a total of $ He purchased a blue boat on May He then purchased a red boat on December
Jack would like to use the maximum Deduction for the purchase. Jack would also like to forgo any applicable bonus depreciation. Please provide a written recommendation to Jack that discusses the tax implications of his purchase.
You may find it helpful to discuss the following topics in your recommendation to Jack:
Jacks basis for the boats.
Whether Jack and his boats qualify for the Deduction.
Whether Jack has avoided the limitations for the Deduction.
a Current inflation adjusted limitation amounts are located in Notice in the examination folder.
Recommend how Jack should allocate his Deduction among the two boats.
Which MACRS depreciation method Jack should use Midyear, Midquarter, etc
