the purchase for tax purpo 6. Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total $170,000 50,000 20,000 $240,000 a. How much of the $240,000 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization?

the purchase for tax purpo 6. Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total $170,000 50,000 20,000 $240,000 a. How much of the $240,000 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q.1 On May 5, 2021, Javier Sanchez purchased and placed in service a new 7-year class asset costing $460,400 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2021, his business generated a net income of $552,480 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2021 and 2022
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Subject: acounting
99. Suzanne, an individual, began business four years ago and has never sold a § 1231 asset. Suzanne owned each of the assets for several years. In the current year, Suzanne sold the following business assets: Asset Original Cost Machinery Furniture Building $12,000 10,000 90,000 Accumulated Depreciation $7,000 2,000 20,000 Gain/Loss $6,000 (3.000) 15,000 Assuming Suzanne's marginal ordinary income tax rate is 35 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?
Tax Drill - Section 179 For his business, McKenzie purchased qualifying equipment that cost $212,000 in 2022. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. McKenzie's § 179 expense deduction is $ for 2022. His § 179 carryover to 2023 is $ b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment? McKenzie's § 179 expense deduction is $ for 2022. His § 179 carryover to 2023 is $
Four years ago, a self-employed taxpayer purchased office furniture for $30,000. During the current tax year, the taxpayer sold the furniture for $37,000. At the time of the sale, the taxpayer's depreciation deductions totaled $20,700. What part of the gain is taxed as long-term capital gain? A. $0 O B. $7,000 C. $20,700 D. $27,700
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FRANK PURCHASED EQUIPMENT FOR $50,000 ON MARCH 1, 2014. AS OF TODAY, FRANK HAS TAKEN $20,000 OF DEPRECIATION DEDUCTIONS ON THE EQUIPMENT. DUE TO CURRENT MARKET CONDITIONS, FRANK DECIDES TO SELL THE EQUIPMENT BECAUSE HE CAN SELL IT NOW FOR $60,000. HOW MUCH AND WHAT TYPE OF GAIN DOES FRANK RECOGNIZE WHEN HE SELLS THE EQUIPMENT NOW? A. $30,000 ORDINARY INCOME. B. $30,000 LONG-TERM CAPITAL GAIN. C. $20,000 LONG-TERM CAPITAL GAIN AND $10,000 ORDINARY INCOME. D. $10,000 LONG-TERM CAPITAL GAIN AND $20,000 ORDINARY INCOME.
Question 7 of 10. Stig purchased a house in 2020 and rented it out the entire time he owned it. His adjusted basis in the property before depreciation is $262,500 ($45,000 attributable to land). In 2022, Stig sold the property for $320,000 with $7,500 in deductible expenses. The total allowable depreciation was $19,093. What is Stig's taxable gain on the disposition of the building? $19,093 $22,345 $30,907 $60,531
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