ack Jones age 35 is single and has no dependents. At the beginning of 2012 Jack started his own excavation business and operated the
business as a sole-proprietor. During all of 2012 Jack had the following items in connection with his business: Gross income from customers $612000 Building rental expenses $ 45000
Office expenses 2500
Utilities 4000
Secretarial salary 34000
Salaries equipment operators 42000
Payroll taxes 7000
Equipment operating costs 21000 Additionally:
Purchased a new front-end loader on
January 15 2012 for $260000. Purchased a new dump truck on
January 18 2012 for $50000 During 2012 Jack had the following additional items: Interest income $10000
Dividend income from Exxon 9500 On October 8 2011 Jack inherited IBM stock from his aunt Mildred. According to the data provided by the executor of her estate the stock
was valued for estate purposes at $110000. Mildred had purchased the stock 9 months before death for $95000. Jack sells the stock on June 1 2012 at a
selling price of $115000. Consider the loader and truck placed in service on date purchased On October 10 2012 Jack purchased and placed in service a new Toyota auto (100% business use). The vehicle%u2019s weight was 4500 pounds
and cost him $45000. Jack did not elect bonus depreciation available to him as a result of the auto purchase. REQUIRED:
Compute Jack%u2019s 2012 adjusted gross income assuming that he selected the front-end
loader as the Sec 179 expensing election item but limited the expensing under Sec 179 to 100000 by choice. Also assume that he did not elect
out of the bonus depreciation available to him on qualifying acquisitions.