At the beginning of its 2023 tax year, Hiram owned the following business assets:FurnitureEquipmentMachineryDepreciationConventionDate Placed inServiceAccumulatedInitial Cost DepreciationRecoveryPeriod6/19/20215/2/20209/30/2020$54,75082,50075,000$21,2327-yearHalf-year58,7405-yearHalf-year53,4005-yearHalf-yearOn July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $598,000; these tools arethree-year recovery property. These were Hiram's only capital transactions for the year.Required:Compute Hiram's maximum cost recovery deduction for 2023. In making your computation, assume that taxable income beforedepreciation exceeds $1,090,000. Use Table 7-2.Note: Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollaramount.FurnitureEquipmentMachineryTotal MACRS DepreciationSection 179/bonus on new toolsMaximum 2023 cost recovery deduction2023 MACRSDepreciation

To compute Hiram's maximum cost recovery deduction for 2023, we'll follow these steps:Calculate the…

Answered: At the beginning of its 2023 tax year,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prior to 2019, the accounting income and taxable income for Sheffield Corporation were the same. On January 1, 2019, the company purchased equipment at a cost of $1,116,000. For accounting purposes, the equipment was to be depreciated over six years using the straight-line method and no residual value. For income tax purposes, the equipment was subject to a CCA rate of 30% (half-year rule applies for 2019). Sheffield's income before tax for accounting purposes for 2020 was $13,000,000. The company was subject to a 20% income tax rate for all applicable years and anticipated profitable years for the foreseeable future. Sheffield follows IFRS. Calculate taxable income and taxes payable for 2020. Taxable income Income taxes payable $ eTextbook and Media List of Accounts %24 %24
Chaz Corporation has taxable income in 2023 of $1,312,450 for purposes of computing the §179 expense and acquired the following assets during the year: Asset Placed in Service Office furniture September 12 Computer equipment February 10 Delivery truck August 21 Qualified real property (MACRS, 15 year, 150% DB) September 30 Total Basis $ 798,000 948,000 86,000 1,517,000 $ 3,349,000 What is the maximum total depreciation deduction that Chaz may deduct in 2023? (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. J'ai besoin d'aide
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Donald owns Tamarisk Company (TC) specializing in manufacturing colonoscopy equipment. In the current year, TC sold a machine fo $31,000. TC had purchased the machine in 2020 for $38,000 and deducted depreciation expense of $26,000. (a) What is the amount and character of the gain/loss? (Enter loss with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).)
TGIF Company owned a building on January 01, 2019, with historical cost of 52,000,000. The property is depreciated over 40 years on a straight-line basis with no residual value. The entity adopted a policy of revaluation of property. The building had so far been revalued twice at fair value. The fair values of the building are as follows: January 01, 2020 : 60,840,000 January 01, 2022 : 72,150,000.How much is the revaluation surplus to be reported in the statement of changes in equity for the year ended December 31, 2022? a. 23,660,000 b. 23,400,000 c. 24,050,000 d. 24,570,000
Tax Drill - AMT and Depreciation In 2019, Brennen sold a machine used in his business for $180,000. The machine was purchased eight years ago for $340,000. Depreciation up to the date of the sale for regular income tax purposes was $210,000 and $190,000 for AMT purposes. For AMT purposes, Brennen has a negative adjustment of $fill in the blank 2 related to the sale.
Emily Spring sold the following assets in 2021. Asset Original Cost Proceeds of Disposition Sportscar $24,000 $10,000 Antique cabinet $1,000 $2,000 A rare coin $100 $1,100 Shares in a public corporation $4,000 $3,000 Canoe $500 $600 Limited edition painting $800 $2,500 Sculpture $1,100 $900 Determine the total taxable income from Emily's sales, identifying the appropriate categories of capital property.
Westmore Industries – which has an effective tax rate of 20% - purchased a $1,000,000 piece of industrial equipment on January 1, 2021. For tax purposes, Westmore depreciates the equipment 40%, 25%, 25%, and 10% in the years 2021, 2022, 2023, and 2024, respectively. For financial reporting purposes, Westmore depreciates the equipment straight-line to a salvage value of zero over the four year useful life. What amount of deferred tax liability will Westmore record at 12/31/2021, 12/31/2022, 12/31/2023, and 12/31/2024?
Yellow Corporation, a C corporation, purchases a building on July 1, 2008, for $1,000,000. Straight- line depreciation is taken in the amount of $425,000 before the property is sold on May 12, 2023, for $1,200,000. What is the amount and character of the gain recognized by Yellow on the sale of the realty? Ordinary income of $115,000 and § 1231 gain of $510,000. Ordinary income of $0 and § 1231 gain of $625,000. Ordinary income of $85,000 and § 1231 gain of $540,000. Ordinary income of $425,000 and § 1231 gain of $200,000.
On April 1, 2024, Titan Corporation purchases office equipment for $50,000. For tax reporting, the company uses MACRS and classifies the equipment as 5-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value.Required: Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes.Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. In which year(s) is tax depreciation greater than financial reporting depreciation?
AMP Corporation (calendar-year-end) has 2020 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2020, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Placed in Asset Service Basis Machinery September 12 $ 1,360,000 Computer equipment February 10 400,000 Office building April 2 515,000 Total $ 2,275,000 a. What is the maximum amount of §179 expense AMP may deduct for 2020? b. What is the maximum total depreciation, including §179 expense, that AMP may deduct in 2020 on the assets it placed in service in 2020, assuming no bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
AMP Corporation (calendar - year - end) has 2023 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2023, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Asset Placed in Service Basis Machinery September 12 $ 1,440,000 Computer equipment February 10 440,000 Office building April 2 555,000 Total $ 2,435,000 a. What is the maximum amount of $179 expense AMP may deduct for 2023? b. What is the maximum total depreciation, including §179 expense, that AMP may deduct in 2023 on the assets it placed in service in 2023, assuming no bonus depreciation?

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