On March 20, 2021, Javier Sanchez purchased and placed in service a new 7-year class asset costing $455,600 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC).

Rather than using bonus depreciation, Javier would like to use 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2021, his business generated a net income of $546,720 before any 179 immediate expense election.

a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2021 and 2022. Total cost recovery deduction in 2021: Total cost recovery deduction in 2022:

b. Complete Javier's Form 4562 (page 1) for 2021.

Note: For 2021, the maximum 179 is $1,050,000 and the threshold amount is $2,620,000.

Form 4562 OMB No. 1545-0172 2021 Attachment Sequence No. 179 Name(s) shown on return Javier Sanchez Business or activity to which this form relates Sanchez Landscaping, LLC Identifying number 123-45-6789 Part I Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 fill in 2 Total cost of section 179 property placed in service (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 fill in 3 Threshold cost of section 179 property before reduction in limitation (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 3 fill in 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 fill in 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing separately, see instructions 5 fill in 6 (a) Description of property (b) Cost (business use only) (c) Elected cost Landscaping equipment fill in fill in 7 Listed property. Enter the amount from line 29 . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 fill in 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 fill in 10 Carryover of disallowed deduction from line 13 of your 2020 Form 4562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 fill in 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) . . . . . . 11 fill in 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 . . . . . . . . . . . . . . . . . . . . . . . . . 12 fill in 13 Carryover of disallowed deduction to 2022. Add lines 9 and 10, less line 12 . . . . 13 fill in Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 Property subject to section 168(f)(1) election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 16 Other depreciation (including ACRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section BAssets Placed in Service During 2021 Tax Year Using the General Depreciation System (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (business/investment use onlysee instructions) (d)Recovery period (e) Convention (f) Method (g) Depreciation deduction 19a 3-year property b 5-year property c 7-year property fill in the blank 16 7 yrs. MQHY DDBS/L fill in the blank 19 d 10-year property e 15-year property f 20-year property g 25-year property 25 yrs. S/L h Residential rental 27.5 yrs. MM S/L property 27.5 yrs. MM S/L i Nonresidential real 39 yrs. MM S/L property MM S/L Section CAssets Placed in Service During 2021 Tax Year Using the Alternative Depreciation System 20a Class life S/L b 12-year 12 yrs. S/L c 30-year 30 yrs. MM S/L d 40-year 40 yrs. MM S/L Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporationssee instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 fill in the blank 20 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N Form 4562 (2021)