Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS? $2,373 $1,970 $1,364 $1,061 $1,009

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Answer 1

Textbook Question

Chapter 8, Problem 1MCQ

Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS?

$2,373
$1,970
$1,364
$1,061
$1,009

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

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Financial data for Hunger Games Company for last year appear below: Hunger Games Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $120,700 $220,000 Accounts receivable 225,000 475,000 Inventory 317,000 390,000 Plant and equipment (net) 940,000 860,000 Investment in Katniss Company 100,000 98,000 Land (undeveloped) 198,000 65,000 Total assets $1,900,700 $2,108,000 Liabilities and owners' equity: Accounts payable $178,700 $8,000 Long-term debt 512,000 600,000 Owners' equity 1,210,000 1,500,000 Total liabilities and owners' $1,900,700 $2,108,000 equity

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Answer 2

Textbook Question

Chapter 8, Problem 1MCQ

Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS?

$2,373
$1,970
$1,364
$1,061
$1,009

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

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Answer 3

Textbook Question

Chapter 8, Problem 1MCQ

Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS?

$2,373
$1,970
$1,364
$1,061
$1,009

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

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Answer 4

Textbook Question

Chapter 8, Problem 1MCQ

Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS?

$2,373
$1,970
$1,364
$1,061
$1,009

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

Answer 8

Expert Solution & Answer

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.

Answer to Problem 1MCQ

Final answer is [c] $1,364

Explanation of Solution

Calculation of maximum depreciation deduction for 2019 on real property assuming mid-month conversion will be for the month of August:

Depreciation=$100,000×1.364%=$1,364

Therefore, option c is the correct option.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Introduction:The modified accelerated cost recovery system (MACRS) is a method of depreciation used for tax purposes in the U.S. It enables taxpayers to recover the capitalized cost of an asset over its life annually as per tax law.

To choose:The correct answer to determine the maximum depreciation deduction for 2019 using MACRS.