17. Don placed in service $20,000 of office furniture on March 1, 2019 and elected to expense the entire amount under Sec. 179. In 2020 the furniture is converted to nonbusiness use. What amount of ordinary income must Don recognize in 2020 (if any)? a. $20,000 b. $ 1,429 c. $ 2,858 d. $17,142 e. None of the answers provided is correct.

17. Don placed in service $20,000 of office furniture on March 1, 2019 and elected to expense the entire amount under Sec. 179. In 2020 the furniture is converted to nonbusiness use. What amount of ordinary income must Don recognize in 2020 (if any)? a. $20,000 b. $ 1,429 c. $ 2,858 d. $17,142 e. None of the answers provided is correct.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 7MCQ: On July 20,2019, Kelli purchases office equipment at a cost of $12,000. Kelli elects out of bonus...

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On July 20,2019, Kelli purchases office equipment at a cost of $12,000. Kelli elects out of bonus depreciation but makes the election to expense for 2019. She is selfemployed as an attorney, and, in 2019, her business has a net income of $6,000 before considering this election to expense. Kelli has no other income or expenses for the year. What is the maximum amount that Kelli may deduct for 2019 under the election to expense, assuming she elects to expense the entire $12,000 purchase? $24,000 $12,000 $6,000 $3,000 $1,000
James purchased office equipment for his business. The equipment has a depreciable basis of $7,000 and was put in service on June 1,2019. James decides to elect straightline depreciation under MACRS for the asset over the minimum number of years (7 years), and does not use bonus depreciation or make the election to expense. What is the amount of his depreciation deduction for the equipment for the 2019 tax year? $2,000 $1,000 $500 $0 None of the above
LO.2, 5 In 2019, Muhammad purchased a new computer for 16,000. The computer is used 100% for business. Muhammad did not make a 179 election with respect to the computer. He does not claim any available additional first-year depreciation. If Muhammad uses the regular MACRS method, determine his cost recovery deduction for 2018 for computing taxable income and for computing his alternative minimum tax.
LO.2 For calendar year 2019, Jean was a self-employed consultant with no employees. She had 80,000 of net profit from consulting and paid 7,000 in medical insurance premiums on her policy covering 2019. How much of these premiums may Jean deduct as a deduction for AGI? How much may she deduct as an itemized deduction (subject to the AGI floor)?
am. 119.
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William purchases nonresidential real property costing $300,000 and places it in service in March 2020. What is Lincoln's 2021 depreciation on the property? a. $6,099 b. $7,692 c. $8,637 d. $10,908
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6. Mr. Thomas Adade is a 56-year-old widower who has three daughters who are all gainfully employed. He was employed as a Operations Manager of Kwatson Limited on September 1, 2019, on a salary scale of GHC152,000 x GHC6,000-GHC200,000. He is also entitled to the following: Fully furnished accommodation, a vehicle with fuel and driver, Unaccountable entertainment allowance of GHC2,500 per month, Inconvenience allowance of GHC2,120 per month and Medical allowance of GHC 7,800 per annum. The following are also applicable to him: a. 7.5% of his basic salary as duty post allowance. b. 15% of his basic salary as a professional allowance. c. 2.5% of his basic salary as risk allowance. d. He was provided with the following household items: soap, gas, and toilet rolls amounting to GHC 1,200 each month. e. Annual bonus of 25% of annual basic salary allowance f. Mr. Adade took a loan of GHC300,000 from his employer at an interest rate of 5% per annum simple interest on 1/1/2023 payable over two…
McKenzie placed in service qualifying equipment (7-year MACRS class) for his business that cost $298,900 in 2023. The taxable income of the business for the year is $125,100 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. Calculate McKenzie's § 179 expense deduction for 2023 and any carryover to 2024. § 179 expense deduction for 2023: $fill in the blank 1 125,100 § 179 carryover to 2024: $fill in the blank 2 b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.3. Additional first-year depreciation for 2023: $fill in the blank 3 MACRS cost recovery for 2023: $fill in the blank 4 Total cost recovery for 2023: $fill in the blank 5
Problem 8-48 (a) (LO. 2, 4) On February 2, 2019, Katie purchased and placed in service a new $18,500 car. The car was used 65% for business, 5% for production of income, and 30% for personal use in 2019. In 2020, the usage changed to 40% for business, 15% for production of income, and 45% for personal use. Katie did not elect immediate expensing under § 179. She elects not to take additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the cost recovery tables of the textbook. Assume the following luxury automobile limitations: year 1: $10,000; year 2: $16,000. a. The cost recovery deduction taken in 2019 was $._____ b. The cost recovery deduction for 2020 is $.____ c. The cost recovery recapture, if any, in 2020 is $._____
am.112.