Terra Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that costs $1,380,000 on April 27, 2022. It was placed in service early in the year and was the only addition this year. Terra elects to depreciate the maximum under Sec. 179 and does not apply bonus depreciation. Terra's taxable income for the year before the Sec. 179 deduction is $1,700,000. What is Terra's total depreciation deduction related to this property?

Terra Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that costs $1,380,000 on April 27, 2022. It was placed in service early in the year and was the only addition this year. Terra elects to depreciate the maximum under Sec. 179 and does not apply bonus depreciation. Terra's taxable income for the year before the Sec. 179 deduction is $1,700,000. What is Terra's total depreciation deduction related to this property?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sheridan Inc's only temporary difference at the beginning and end of 2024 is caused by a $3.54 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $1,062,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,900,000. and taxable income is expected in all future years. (a) Your answer is incorrect. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability $ eTextbook and Media List of Accounts Save for Later Last saved 15 hours ago Attomu
DeMaria Corporation, a calendar year corporation, generates the following taxable income (net operating losses) since its inception in 2020: Year Taxable result 2020 $ 40,000 2021 (15, 000) 2022 5,000 Assuming DeMaria makes no special elections with regard to NOLS, what is DeMaria's net operating loss carryforward into 2023? If your answer is zero, enter "0".
On November 23, 2023, Hamlet acquires and places in service a 7-year class asset with a cost of $491,400 (the only asset acquired during the year). Hamlet does not elect immediate expensing under § 179. He does not claim any available additional first-year (bonus) depreciation. This is Hamlet's only tangible personal property acquisition for the year. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. Calculate Hamlet's cost recovery deduction for 2023 and 2024. 2023: $ X 2024: $
McKenzie placed in service qualifying equipment (7-year MACRS class) for his business that cost $346,600 in 2023. The taxable income of the business for the year is $97,900 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. Calculate McKenzie's § 179 expense deduction for 2023 and any carryover to 2024. § 179 expense deduction for 2023: $ § 179 carryover to 2024: b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.3. Additional first-year depreciation for 2023: $ MACRS cost recovery for 2023: $ Total cost recovery for 2023: $
WCC Corporation has a $125,000 net operating loss carryover into 2021. Assume that it reported $80,000 of taxable income in 2021 (before the net operating loss deduction) and $55,000 of taxable income in 2022 (before the net operating loss deduction). (Leave no answer blank. Enter zero if applicable.) b. What is WCC’s taxable income in 2021 and 2022 (after the net operating loss deduction), assuming the $125,000 NOL carryover originated in 2020 and WCC elected to not carry back the loss?
A taxpayer places a $1,090,000 5-year recovery period asset in service in 2022. This is the only asset placed in service in 2022. Assuming half-year convention, an election to expense under Section 179, and no income limitation, what is the amount of total cost recovery deduction (no bonus depreciation)?
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.
In 2017, Rusk Corporation has a net operating loss of $10,000 that Rusk may only carry forward. In 2018, Rusk has a net operating loss of $12,000. In 2019, Rusk generates taxable income of $15,000. Rusk must first use the $10,000 2017 NOL leaving taxable income of $5,000. Rusk may use $4,000 ($5,000 x 80% limit) of the 2018 NOL and will report taxable income of $1,000 for 2019. Question : How much is the remaining 2018 net operating loss that may be carried forward indefinitely, subject to 80% income limit each year?
For federal tax purposes, how long should a sole proprietor keep records on a machine used 100% for business? Until three years after the due date of the return for the year: When the machine is placed into service. When the machine is purchased. That ends four years after the machine was first placed into service. In which the machine is disposed of in a taxable disposition.
Auburn Rentals acquired an asset for $160 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis with no residual value. For tax purposes the asset is depreciated using an accelerated method. The enacted tax rate is 30%. Annual amounts for pretax accounting income, depreciation, and taxable income are as follows: 2021 2022 2023 2024 Pretax accounting income $500 $550 $600 $650 Depreciation on the income statement 40 40 40 40 Depreciation on the tax return (50) (66) (30) _(14). Taxable income 450 484 570 636 On December 31, 2023, what amount of deferred tax liability would Auburn report? Multiple Choice S3.2 million $10.0 million $26.0 million $7.8 million
In 2020, Company W elected under Section 179 to expense $19,300 of the cost of qualifying property. However, it could deduct only $15,000 of the expense because of the taxable income limitation. In 2021, Company W's taxable income before any Section 179 deduction was $1,812,000. Required: a. Compute its 2021 Section 179 deduction if the total cost of qualifying property purchased in 2021 was $13,600. b. Compute its 2021 Section 179 deduction if the total cost of qualifying property purchased in 2021 was $1,048,000. Complete this question by entering your answers in the tabs below. Answer is complete but not entirely correct. Required A Required B Compute its 2021 Section 179 deduction if the total cost of qualifying property purchased in 2021 was $1,048,000. Deduction $ 1,040,000 X
.(BE 18-7) Myers Corp. purchased depreciable assets costing $30,000 on January 2, 2020. For tax purposes, the company uses CCA in a class that has a 30% rate. For financial reporting purposes, the company uses straight-line depreciation over five years. The enacted tax rate is 25% for all years. This depreciation difference is the only reversing difference the company has. (a) Calculate the amount of capital cost allowance and depreciation expense from 2020 to 2024, as well as the corresponding balances for the carrying amount and undepreciated capital cost of the depreciable assets at the end of each of the years 2020 to 2024. Assume that these assets are considered "eligible equipment" for purposes of the Accelerated Investment Incentive (under the All, instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). Round to the nearest dollar. (b) Determine the amount of deferred taxes that should be reported in the SFP for…