Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 8, Problem 5P
To determine
Introduction: The modified accelerated cost recovery system (MACRS) is a method of
The MACRS depreciation life of the given assets.
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Indicate whether the following items are Section 1245 or Section 1250 property or, if neither, indicate what type of property they are considered to be (e.g., capital asset, Section 1231 asset). (Remember that Section 1245 and Section 1250 properties are sub-categories of depreciable Section 1231 property.) Assume all the items have been held long-term.
Equipment used in the business
Personal automobile
Truck used in the business
Escalator used in the business
Inventory
Residential rental housing
Nonresidential real property depreciated under the straight-line method
Leasehold of Section 1245 property
A1
Chapter 8 Solutions
Income Tax Fundamentals 2020
Ch. 8 - Alice purchases a rental house on August 22,2019,...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - James purchased office equipment for his business....Ch. 8 - Which of the following statements with respect to...Ch. 8 - Which of the following is not true about the MACRS...Ch. 8 - On July 20,2019, Kelli purchases office equipment...Ch. 8 - Which of the following is not considered a limit...Ch. 8 - In 2019, Ben purchases and places in service a new...Ch. 8 - In 2019, Ben purchases and places in service a new...
Ch. 8 - Prob. 11MCQCh. 8 - Prob. 12MCQCh. 8 - Prob. 13MCQCh. 8 - In 2019, Mary sells for $24,000 a machine used in...Ch. 8 - Prob. 15MCQCh. 8 - Prob. 16MCQCh. 8 - Virginia has business property that is stolen and...Ch. 8 - Pat sells land for $25,000 cash and a $75,000...Ch. 8 - Prob. 19MCQCh. 8 - Prob. 20MCQCh. 8 - Oscar owns a building that is destroyed in a...Ch. 8 - Prob. 22MCQCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - 3. Mike purchases a new heavy-duty truck (5-year...Ch. 8 - On March 8,2019, Holly purchased a residential...Ch. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Calculate the following: The first year of...Ch. 8 - During 2019, William purchases the following...Ch. 8 - On February 2,2019, Alexandra purchases a personal...Ch. 8 - On September 14,2019, Jay purchased a passenger...Ch. 8 - Tom has a successful business with $100,000 of...Ch. 8 - Prob. 14PCh. 8 - Annie develops a successful tax practice. She...Ch. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21P
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- Oriole Enterprises incurred several costs related to the acquisition of plant assets. Purchase price of land and dilapidated building Real estate broker's commission Demolition costs of dilapidated building Architect's fees and building permits Payments to contract for building construction Purchase of new furniture and equipment Actual interest costs during building construction Actual interest cost after completion of building construction Costs of walks, driveways, and parking lot $228800 O $243760 $248160 $311520 O $263120 14960 19360 21120 765600 65120 118800 105600 48400 At what amount should the land be recorded in Oriole's accounting records?arrow_forwardAn example of a non-depreciable asset or property that can be used to earn business is ____________. Question 5 options: a) Building b) Equipment c) Patent d) Furniturearrow_forwardGrover Inc. wishes to use the revaluation model for this property: Building Gross Value Building Accumulated Depreciation Net carrying value The fair value for the property is $100,000. What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the proportional method to record the revaluation? OA. $20,000 credit B. $10,000 credit O C. SO Before Revaluation $120,000 40,000 80,000 D. $10,000 debitarrow_forward
- DLW Corporation acquired and placed in service the following assets during the year. Date Acquired 3/10 Cost Basis $ 14,500 $ 26,700 $ 333,000 5/5 8/25 Asset Computer equipment Furniture Commercial building Assuming DLW does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1. Table 2. Table 3, Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Problem 10-47 Part a (Algo) a. What is DLW's year 1 cost recovery for each asset? Asset Computer equipment Furniture Commercial building Total Year 1 Cost Recovery $ 0arrow_forwardHow do we calculate the Amount of Loss?arrow_forwardThe Home Depot financial statements appear in Appendix A at the end of this textbook. Use thesestatements to answer the following questions and indicate where in the financial statements youfound the information. a. What depreciation method does Home Depot use for buildings, furniture, fixtures, and equip-ment? What are the useful lives over which these assets are depreciated? b. From the notes to Home Depot ’s financial statements, what can you learn about the company’spolicy regarding impairment of plant assets?c. Locate Home Depot ’s balance sheet and find the section entitled “Property and Equipment, atcost.” As of January 31, 2010, determine the amount of the company’s investment in propertyand equipment and the amount of depreciation taken to date on those assets. Are these assets,taken as a whole, near the beginning or end of their estimated useful lives? Explain your answer.arrow_forward
- Dogarrow_forwardOn July 1, 2024, Jekel & Hyde Incorporated purchased land and incurred other costs relative to the construction of a new warehouse. A summary of economic activities is listed below: Purchase price Title insurance Legal fees to purchase land cost of razing old building on lot Proceeds from sale of salvageable materials. Property taxes, January 1, 2024-June 30, 2024 cost of grading and filling building site Cost of building construction Interest on construction loan cost of constructing driveway cost of parking lot and fencing $ 200,000 $ 3,000 $ 2,500 11,500 (2,700) 4,500 10,500 Land Building Land improvements 635,000 13,500 9,500 13,500 Required: Indicate the accounts that would be affected by the above transactions and the resulting balance in each account. Apply the interest on the construction loan to the cost of the building only.arrow_forward41-Which one of the following fixed Asset does not requires depreciation? a. Factory land b. Motor cars bought but not used c. Building d. Electrical fittingsarrow_forward
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