On July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $612,000; these tools are three-year recovery property. These were Hiram's only capital transactions for the year. Compute Hiram's maximum cost recovery deduction for 2019. In making your computation, assume that taxable income before depreciation exceeds $1,230,000. Use Table 7-2. (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar amount.)
On July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $612,000; these tools are three-year recovery property. These were Hiram's only capital transactions for the year. Compute Hiram's maximum cost recovery deduction for 2019. In making your computation, assume that taxable income before depreciation exceeds $1,230,000. Use Table 7-2. (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar amount.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At the beginning of its 2019 tax year, Hiram owned the following business assets:
Date Placed
in Service
6/19/17
5/2/16
Accumulated
Depreciation
$17,936
Recovery Depreciation
Period Convention
9/30/16
Furniture
Equipment
Machinery
Furniture
Equipment
Machinery
Initial
Cost
$46,250
89,000
80,500
Total MACRS Depreciation
Section 179/bonus on new tools
Total 2019 cost recovery
On July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $612,000; these tools
are three-year recovery property. These were Hiram's only capital transactions for the year. Compute Hiram's maximum cost
recovery deduction for 2019. In making your computation, assume that taxable income before depreciation exceeds
$1,230,000. Use Table 7-2. (Enter all amounts as positive values. Round your intermediate computations and final answers
to the nearest whole dollar amount.)
63,368
57,316
2019 MACRS
Depreciation
Half-year
7-year
5-year Half-year
5-year Half-year
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