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Jack owns and operates Puget Tours, a sight-seeing company that provides boat-tours in Washington State...

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Accounting

Jack owns and operates Puget Tours, a sight-seeing company that provides boat-tours in Washington State for whale watchers. Jack purchases two boats for $1,240,000 each in 2020 for a total of $2,480,000. He purchased a blue boat on May 15,2020. He then purchased a red boat on December 20,
2020. Jack would like to use the maximum 179 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:
1. Jacks basis for the boats.
2. Whether Jack and his boats qualify for the 179 Deduction.
3. Whether Jack has avoided the limitations for the 179 Deduction.
a. Current inflation adjusted limitation amounts are located in Notice 2019-44 in the examination folder.
4. Recommend how Jack should allocate his 179 Deduction among the two boats.
Which MACRS depreciation method Jack should use (Mid-year, Mid-quarter, etc).

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