Provide this question general solution accounting Gareth, a sales tax registered trader, purchased a computerfor use in his business. The invoice for the computershowed the following costs related to the purchase.ComputerAdditional memoryDeliveryInstallation(in Pound)890951020Maintenance (one year) 251040Sales tax (17.5%)1821222TotalHow much should Gareth capitalize as a non-current assetin relation to the purchase?a) 920 Poundb) 910 Poundc) 1040 Poundd) 1015 Pound

Step 1: Define Non-Current AssetsNon-current assets are also known as fixed assets because they are…

Answered: Gareth, a sales tax registered trader,…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 14MCQ: In 2019, Mary sells for $24,000 a machine used in her business. The machine was purchased on May...

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In 2019, Mary sells for $24,000 a machine used in her business. The machine was purchased on May 1,2017, at a cost of $22,000. Mary has deducted depreciation on the machine of $6,000. What is the amount and nature of Mary's gain as a result of the sale of the machine? $2,000 Section 1231 gain $8,000 ordinary income under Section 1245 $6,000 ordinary income and $2,000 Section 1231 gain $6,000 Section 1231 gain and $2,000 ordinary income under Section 1245 None of the above
Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?
Dog Derek purchased a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets $170,000Goodwill 50,000Covenant not to compete 20,000Total $240,000 What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization? Use months, not days, in your computations. Round your answer to the nearest dollar.Can someone explain me this step by step. Im stuck here.
Devon purchased a small business from Art on August 30, 2023, and paid the following amounts for the business: Line Item Description Amount Fixed assets $303,400 Goodwill 60,680 Covenant not to compete 75,850 Total $439,930 b. What amount can Devon deduct on his 2023 tax return as Section 197 intangible amortization? If required, round the final answer to the nearest dollar. Use months, not days, in your computations.
Haresh
Joaquin purchased a $235,000 crane for a construction business. The crane was sold for $175,000 after taking $115,000 of depreciation. Assume Joaquin is in the 35% tax rate bracket. Required: a. On what form would the gain or loss originally be reported? b. What is the amount of gain or loss on the sale? c. What amount of the gain or loss is subject to ordinary tax rates? Complete this question by entering your answers in the tabs below. Required a Required b Required c PS What is the amount of gain or loss on the sale?
Greg Grotto exchanged an eight-unit apartment building for a four-unit apartment building. His adjusted basis for the eight-unit building was $320,000 and the fair market value was $400,000. The fair market value of the four-unit building he received, which was subject to a $40,000 mortgage, was $440,000 on the date of the transaction. How much gain does Greg need to recognize? a. $120,000 b. $80,000 c. $48,000 d. $40,000 e. $0 Please do not give solution and formulae in image format.. thanku
Sebastian purchases two pieces of equipment for $100,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $72,000 and that of the second piece of equipment is $108,000. What is Sebastian's basis in these two assets? Do not round your interim calculations. If required, round your final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is $____ and $_______ for the second piece of equipment.
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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
On April 12, 2020, Suzanne bought a computer for $20,000 for business use. This was the only purchase for that year. Suzanne used the most accelerated depreciation method available but did not apply Sec. 179 or bonus depreciation. Suzanne sells the machine in 2021. The depreciation on the computer for 2021 is a. $2,000. b. $3,200. c. $4,000. d. $6,400.
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.

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