Brennen sold a machine used in his business for $268,200. The machine waspurchased eight years ago for $482,760. Depreciation up to the date of the sale forregular income tax purposes was $308,430 and $277,587 for AMT purposes. WhatAMT adjustment arises as a result of the sale of the machine?For AMT purposes, Brennen has a negative adjustment of $------- related to thesale?

The purpose of AMT is to guarantee that taxpayers with substantial economic resources pay a fair and…

Brennen sold a machine used in his business for $268,200. The machine was purchased eight years ago for $482,760. Depreciation up to the date of the sale f regular income tax purposes was $308 130 and $277587 for AMT purposes Whi

Brennen sold a machine used in his business for $268,200. The machine was purchased eight years ago for $482,760. Depreciation up to the date of the sale f regular income tax purposes was $308 130 and $277587 for AMT purposes Whi

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse…

A: Answer to question a. Purchase cost of warehouse $65,000 Less: Depreciation claimed till year 0…

Q: Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On the date…

A: Capital Gain -An asset or investment that experiences a rise in value due to price appreciation is…

Q: Redbud began operations at the beginning of Year 1, and has one depreciable asset with an original…

A: In this question, there are multiple sub-parts but we solved only 3 sub-parts as per guidelines, if…

Q: 2020. The corporation’s depreciation for the building for 2020 will be approximately:

Q: Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000.…

A: Loss on the original sale = $99,000 -$96,000 = $3,000 ParticularsAmount in dollarsResold…

Q: Sisto purchased a passenger automobile for $49,890. He placed it into service on May 16; 60% of the…

A: Decrease in the value of the fixed assets due to passage of time , were and tear are call…

Q: I want to correct answer

A: Approach to solving the question:Understanding and Analysis Detailed explanation: To determine…

Q: P, a noncorporate taxpayer, purchased residential realty in 1985 for $1,000,00 erated depreciation…

A: Ordinary Income -The money that a person or a company makes from wages or salaries, commissions,…

Q: Weatherford purchased a machine with 5 year MACRS for 200,000. They spent an additional 25,000…

A: Purchase Price of Machine = 200,000Total Additional Cost = 25,000 + 25,000 = 50,000MACRS…

Q: Barry sold depreciable property used in his business to Ken for $192,000 cash plus a bond redeemable…

A: Cash received on sale of property=$192,000 5 years redeemable bonds=$95000 Current value=$98000…

Q: Accounts receivable Inventory Furniture and equipment: Cost Accumulated depreciation Leasehold…

A: The process of collecting taxes from individuals and corporations is known as taxation, whereas Fair…

Q: In year 0, Longworth Partnership purchased a machine for $57,250 to use in its business. In year 3,…

A: Answer:- Deprecation refers to the decrease in the value of an asset over time due to factors…

Q: Joaquin purchased a $235,000 crane for a construction business. The crane was sold for $175,000…

A: Book value or carrying value of crane = Cost - accumulated depreciation Gain or loss on sale of…

Q: Urmila

A: To solve this problem, we need to calculate the total gain or loss recognized by Longworth…

Q: CCC Manufacturing Inc. sold equipment that it uses in its business for $110,000. CCC bought the…

A: If the sale value is more than the adjusted value of equipment than it results in Capital gain. If…

Q: Cork Oak Corporation purchased a heavy-duty truck (not considered a passenger automobile for…

A: Since you have posted two independent questions, therefore, as per the guidelines, the solution to…

Q: preciation with respect to the machinery was Lento sold the machinery for $13,000 in cash. Lento's…

A: A gain or loss on the sale of property, plant, and equipment is determined by comparing the original…

Q: Piper’s Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000,…

A: Given information is: Sale Revenue of Equipment = $25,000 Original cost of Equipment = $72,000…

Q: Wheeler Co. purchased machinery on 1/1/2022 for $450,000. Assuming no salvage value, Wheeler…

A: The term deferred tax liability is an item on the company's balance sheet that records the taxes…

Q: Ngu owns equipment that cost $97,100 with accumulated depreciation of $66,400. Ngu asks $35,900 for…

A: given that, cost of the equipment = $97100 accumulated depreciation = $66400 sale price of the…

Q: In year 0, Longworth Partnership purchased a machine for $56,000 to use in its business. In year 3,…

A: Deprecation refers to the decrease in the value of an asset over time due to factors similar as…

Q: Victoria's company purchased business real estate many years ago that is used in her business. The…

A: Section 1231 property is a real or depreciable business property , held for more than 1 year. And as…

Q: Diaz Company owns a machine that cost $125,100 and has accumulated depreciation of $90,600. Prepare…

A: Formulas: Gain (Loss) on the sale of the assets = Sale value of the assets - Net book value of the…

Q: In year O, Longworth Partnership purchased a machine for $58,250 to use in its business. In year 3,…

A: The question is based on the concept of Financial Accounting.

Q: An apartment building was acquired in 2014 by an individual taxpayer. The depreciation taken on the…

A: Unrecaptured § 1250 gain is an income tax provision. The unrecaptured § 1250 gain helps to recapture…

Q: Barry sold depreciable property used in his business to Ken for $192,000 cash plus a bond redeemable…

A: Step 1 Hello. Since your question has multiple parts, we will solve first question for you. If you…

Q: Sumner's only disposition during the year, what is the amount of Sumner's §1231 gain or loss? (Use…

A: Capital gain is the gain earned after the sale of Fixed Assets at a price over the Book Value. Net…

Q: an ind

A: An income(sum of all total income) that can be received by a person in a full year is termed gross…

Q: The depreciated value of the washing machine can be modeled by the equation V= _______ +…

A: Give that V = depreciated value t = number of years. Initial cost of the machine $1045 Depreciation…

Q: Sumner sold equipment that it uses in its business for $31,400. Summer bought the equipment a few…

A: Depreciation can be defined as decrease in the book value of an asset each year.

Q: Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and…

A: The sale of §1231 assets involves disposing of depreciable business assets, such as machinery or…

Q: Bateman Corporation sold an office building that it used in its business for $800,700. Bateman…

A: Answer: The gain on selling an office building is computed as follows: Cost of an office building…

Q: Diaz Company owns a machine that cost $126,500 and has accumulated depreciation of $92,000. Prepare…

A: Journal entries describe how transactions influence accounts and balances and serve as a simple…

Q: Assuming Suzanne's marginal ordinary income tax rate is 35 percent, what is the character of the…

A: Depreciation is a value obtained from an asset's usual wear and tear. Also, it is an amount kept…

Q: Diaz Company owns a milling machine that cost $125,200 and has accumulated depreciation of $90,700.…

A: Carrying Amount of Asset = cost - Accumulated Depreciation Gain/Loss on Sales = Sale Price -…

Q: ng the year, Irv had the following transactions: Long-term loss on the sale of business use…

Q: At the beginning of its 2023 tax year, Hiram owned the following business assets: Furniture…

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

Q: Alpha sold machinery, which it used in its business, to Beta, a related entity, for $40,250. Beta…

A: Answer:- Depreciation expense meaning:- Depreciation expense is basically the cost of an asset that…

Q: The Jordan Corp (C Corporation), a calendar year taxpayer, sold a piece of equipment, a piece of…

A: As this is a multi part questions and based on our policy we are answering first 3 part if you want…

Q: On January 1, 2022, Aniyah, a sole proprietor, purchased for use in her business a used production…

A: A taxpayer is allowed to claim a deduction for the depreciation The depreciation amount according to…

Question

Brennen sold a machine used in his business for $268,200. The machine was
purchased eight years ago for $482,760. Depreciation up to the date of the sale for
regular income tax purposes was $308,430 and $277,587 for AMT purposes. What
AMT adjustment arises as a result of the sale of the machine?
For AMT purposes, Brennen has a negative adjustment of $------- related to the
sale?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Working notes for the calculation of alternate minimum tax

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Sergio, a sole proprietor, purchased a van for $35,000 to use exclusively in his delivery business. Six months later, he sold the van for $38,000. Sergio's $3,000 gain from the sale of this property should be reported as: O Gross receipts or sales on Schedule C, Part I. A gain from the sale or exchange of property used in a trade or business on Form 4797, Part I. An ordinary gain on Form 4797, Part II. O A gain from the disposition of property on Form 4797, Part III.
Yasmin purchased two assets during the current year. On May 26th Yasmin placed in service computer equipment (five-year property) with a basis of $17,000 and on December 9th placed in service machinery (seven-year property) with a basis of $17,000. Calculate the maximum depreciation deduction (ignoring §179 and bonus depreciation). (Use MACRS Table 2.)
6. On May 11, 20x8, Taxpayer purchased an office building for $220,000, of which $30,000 was allocated to the land on which the building was located. The building's salvage value was estimated to be $50,000. What amount will Taxpayer deduct for depreciation on his/her 20x9 federal income tax return? A. $ 3,590 B. 4,870 C. 5,640 D. 6,910 E. None of the above
Terry purchased a machine for $15,000; the seller is holding the note. Terry paid $2,500 for the required wiring and installation. Terry has deducted depreciation on the machine for 3 years totaling $4,500. Terry owes $5,000 to the Seller. What is Terry’s adjusted basis in the machine? $10,500 $8,000 $13,000 $5,500
Diaz Company owns machine that cost $126,300 and has accumulated depreciation of $93,000. Prepare the entry to record the disposal of the machine on January 1 in each separate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. 2. Diaz sold the machine for $16,600 cash. 3. Diaz sold the machine for $33,300 cash. 4. Diaz sold the machine for $40,400 cash. View transaction list Journal entry worksheet 1 2 Record the disposal of the machine receiving nothing in return. Date January 01 3 4 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general Journal >
Hart, an individual, bought an asset for $500,000 and has claimed $100,000 of depreciation deductions against the asset. Hart has a marginal tax rate of 32 percent. Answer the questions presented in the following alternative scenarios (assume Hart had no property transactions other than those described in the problem): Note: Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answers blank. Enter zero if applicable.
Godo Farhana purchased a new stove for $600 and placed it in service in her rental house in June 2018. No special depreciation allowance was claimed. Farhana sold the rental house, including the stove, in October 2021. Her adjusted basis including depreciation on the stove at the time of sale was $139. The stove was included in the sale, but the statement specified a price of $375, leaving a $236 gain. Under what section of the Internal Revenue Code will that gain fall?
3. In year 0, Canon purchased a machine to use in its business for $56,000. In year 3, Canon sold the machine for $42,000. Between the date of the purchase and the date of the sale, Canon depreciated the machine by $32,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) b. What are the amount and character of the gain or loss Canon will recognize on the sale, assuming that it is a corporation? Total Gain/Loss Recognized? Ordinary Gain/Loss? 1231 Gain/Loss?
7. Gibby sold 4-year-old business machinery for $100,000.The machinery had an original cost of $ 80,500. Gibby claimed$ 12,500 in depreciation through the date of sale. The only other§ 1231 transactions H has had were in the two prior years. Hehad a §1231 gain of $3,500 two years ago and a §1231 loss of$12,000 last year. How are Gibby’s gains for the current yeartreated?a. $12,500 ordinary gain; $19,500 long-term capital gainb. $21,000 ordinary gain; $11,000 long-term capital gainc. $24,500 ordinary gain; $7,500 long-term capital gaind. $32,000 ordinary gaine. $32,000 long term capital gain
Terry purchased a machine for $15,000; the seller is holding the note. Terry paid $2,500 for the required wiring and installation. Terry has deducted depreciation on the machine for 3 years totaling $4,500. Terry owes $5,000 to the Seller. What is Terry’s adjusted basis in the machine? Group of answer choices
Munabhai
Diaz Company owns a machine that cost $125,400 and has accumulated depreciation of $90,900. Prepare the entry to record the disposal of the machine on January 1 in each separate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return.2. Diaz sold the machine for $17,500 cash.3. Diaz sold the machine for $34,500 cash.4. Diaz sold the machine for $41,300 cash. Journal entry worksheet