Lars acquired a new network
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Lars acquired a new network system on June 5, 2022 (five-year class property), for $60,000. She expects taxable income from the business will always be about $170,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2022 for $340,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2022.
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- Eva purchased office equipment (7-year property) for use in her business. She paid $12,600 for the equipment on July 1, 2018. Eva did not purchase any other property during the year. For 2018, her business had net income of $6,000, before depreciation on the office equipment and before considering the election to expense. Eva elects out of bonus depreciation. a. What is the maximum amount that Eva can elect to expense in 2018 under Section 179? b. What is the total depreciation (regular depreciation and the amount allowed as a 2018 deduction under the election to expense) on the office equipment for 2018, assuming Eva uses the accelerated method under MACRS and claims the maximum amount allowable under the election to expense?Lars acquired a new network system on June 5, 2023 (five-year class property), for $69,000. She expects taxable income from the business will always be about $215,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2023 for $430,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2023.In 2019, José purchased a house for $191,400. He used the house as his personal residence. In June 2022, when the fair market value of the house was $331,300, he converted the house to rental property. If required, round your answers to the nearest dollar. Click here to access depreciation tables in the textbook. a. José's basis for cost recovery for the property is $ b. Under MACRS, the cost recovery period for residential rental real estate is 27.5 mid-month ✔✓ convention. c. The cost recovery for 2022 is $ 5,510 X. 191,400 ✔. ✓ years, and it is subject to the
- After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $312,000. Ingrid allocated $52,000 of the purchase price to goodwill. Ingrid’s business reports its taxable income on a calendar-year basis. a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3?Shellie purchased a passenger automobile on March 2, 2018. She paid $65,000 for the automobile and can support business use of 85 percent. Calculate the amount of depreciation on the automobile for 2018 using the accelerated MACRS method (if available), assuming Shellie does not make the election to expense or claim bonus depreciationBrian acquired a rental house in 2004 for a cost of $80,000. Straight-line depreciation on the property of $26,000 has been claimed by Brian. In January 2020, he sells the property for $120,000, receiving $20,000 cash on March 1 and the buyer's note for $100,000 at 10 percent interest. The note is payable at $10,000 per year for 10 years, with the first payment to be received 1 year after the date of sale. Calculate his taxable gain under the installment method for the year of sale of the rental house. In your computations, round any division to two decimal places. Gain reportable in 2020 is $fill in the blank 1.
- On September 14, 2021, Jay purchased a passenger automobile that is used 75 percent in his business. The automobile has a basis for depreciation purposes of $45,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179. Calculate Jay's depreciation deduction for 2021 assuming bonus depreciation.Lina purchased a new car for use in her business during 2023. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2023 and 2024 (Lina doesn't want to take bonus depreciation for 2023 or 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) f. The vehicle cost $84,800, and is an SUV that weighs 6,500 pounds. Business use was 100 percent. Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92…Tonia acquires the following 5-year class property in 2019: Asset Date of Acquisition Cost X January 15 $ 70,000 Y May 28 45,000 Z November 23 90,000 Total $ 205,000 Tonia does not elect §179 or bonus depreciation. Tonia has $300,000 of taxable income from her business. Determine her total cost recovery deduction for the year.
- Marcy Tucker received the following items this year. Determine to what extent each item is included in her AGI. Assume the taxable year is 2022. Required: A $29,250 cash gift from her parents. A $670 cash award from the local Chamber of Commerce for her winning entry in a contest to name a new public park. $8,850 alimony from her former husband, which he paid under the terms of their 2011 divorce decree. $117,000 cash inheritance from her grandfather.On October 15, 2023, Jon purchased and placed in service a used car. The purchase price was $38,000. This was the only business use asset Jon acquired in 2023. He used the car 80% of the time for business and 20% for personal use. Jon used the regular MACRS method. Calculate the total maximum deduction Jon may take for 2023 with respect to the car, if he (a) elects out of bonus deprecation, and (b) if he takes bonus depreciation. (This differs from the question asked in the text.) If he elects out of bonus depreciation: If bonus is taken (because it was NOT elected out):Milt Payner purchased an automobile several years ago for $40,000 and has held it as a personal asset ever since. This year he sold the automobile. Assume the taxable year is 2022. Required: a. Compute Milt's recognized gain or loss on the sale if Milt's amount realized on sale was $28,300. b. Compute Milt's recognized gain or loss on the sale if Milt's amount realized on sale was $55,000. The automobile was a classic Thunderbird and was purchased by a vintage car collector in Boston. Complete this question by entering your answers in the tabs below. Required A Required B Compute Milt's recognized gain or loss on the sale if Milt's amount realized on sale was $28,300. Note: If the results of a transaction do not result in a gain or loss, select "No recognized gain or loss".