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.) (Round your answer to the nearest whole dollar amount.) Acorn provided you with the following information: Asset New equipment and tools Used light-duty trucks Used machinery Total Placed in Service August 20 October 17 November 6 Maximum cost recovery deduction Basis $ 1,800,000 1,500,000 525,000 $ 3,825,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction. a. What is Acorn's maximum cost recovery deduction in the current year?
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.) (Round your answer to the nearest whole dollar amount.) Acorn provided you with the following information: Asset New equipment and tools Used light-duty trucks Used machinery Total Placed in Service August 20 October 17 November 6 Maximum cost recovery deduction Basis $ 1,800,000 1,500,000 525,000 $ 3,825,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction. a. What is Acorn's maximum cost recovery deduction in the current year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.) (Round your answer to the nearest whole dollar amount.)
Acorn provided you with the following information:
Asset
New equipment and tools
Used light-duty trucks
Used machinery
Total
Placed in
Service
August 20
October 17
November 6
Maximum cost recovery deduction
Basis
$ 1,800,000
1,500,000
525,000
$ 3,825,000
The used assets had been contributed to the business by its owner in a tax-deferred transaction.
a. What is Acorn's maximum cost recovery deduction in the current year?
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