Acorn Construction (calendar-year-end C corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has record income and would like to maximize its cost recovery deduction for the current year. (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Round your answer to the nearest whole dollar amount. Acorn provided you with the following information: Placed in Service August 20 October 17 November 6 Asset New equipment and tools Used light-duty trucks Used machinery Total Basis $ 3,800,000 2,000,000 1,525,000 $ 7,325,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction two years ago. a. What is Acorn's maximum cost recovery deduction in the current year? Answer is complete but not entirely correct. $947,917 Maximum cost recovery deduction
Acorn Construction (calendar-year-end C corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has record income and would like to maximize its cost recovery deduction for the current year. (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Round your answer to the nearest whole dollar amount. Acorn provided you with the following information: Placed in Service August 20 October 17 November 6 Asset New equipment and tools Used light-duty trucks Used machinery Total Basis $ 3,800,000 2,000,000 1,525,000 $ 7,325,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction two years ago. a. What is Acorn's maximum cost recovery deduction in the current year? Answer is complete but not entirely correct. $947,917 Maximum cost recovery deduction
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1
Transcribed Image Text:Acorn Construction (calendar-year-end C corporation) has had rapid expansion during the last half of the current year
due to the housing market's recovery. The company has record income and would like to maximize its cost recovery
deduction for the current year. (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.)
Note: Round your answer to the nearest whole dollar amount.
Acorn provided you with the following information:
Placed in
Service
August 20
October 17
November 6
Asset
New equipment and tools
Used light-duty trucks
Used machinery
Total
Basis
$ 3,800,000
2,000,000
1,525,000
$ 7,325,000
The used assets had been contributed to the business by its owner in a tax-deferred transaction two years ago.
a. What is Acorn's maximum cost recovery deduction in the current year?
Answer is complete but not entirely correct.
$
947,917
Maximum cost recovery deduction
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