Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
Question
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Chapter 9, Problem 29P

a.

To determine

Compute Mr. R’s adjusted basis of auto under automatic mileage method.

b.

To determine

Compute Mr. R’s adjusted basis of auto under actual operating cost method.

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On July 1, 2014, Rex purchases a new automobile for $40,000. He uses the car 80% for business and drives the car as follows: 8,000 miles in 2014, 19,000 miles in 2015, 20,000 miles in 2016, and 15,000 miles in 2017. Determine Rex’s basis in the business portion of the auto as of January 1, 2018, under the following assumptions: Rex uses the automatic mileage method.     2.Rex uses the actual cost method. [Assume that no § 179 expensing is       claimed and that 200% declining-balance cost recovery with the half-year convention is used-see Chapter 8. The recovery limitation for an auto placed in service in 2014 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).]
On July 1, 2015, Rex purchases a new automobile for $40,000. He uses the car 80% for business and drives the car as follows: 8,000 miles in 2015, 19,000 miles in 2016, 20,000 miles in 2017, and 15,000 miles in 2018. Determine Rex's basis in the business portion of the auto as of January 1, 2019, under the following assumptions: If required, round answers to the nearest dollar. a.  Rex uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2015: $fill in the blank 7c768af94f81f83_1 2016: $fill in the blank 7c768af94f81f83_2 2017: $fill in the blank 7c768af94f81f83_3 2018: $fill in the blank 7c768af94f81f83_4 Rex's adjusted basis in the auto on January 1, 2019, is $fill in the blank 7c768af94f81f83_5. b.  Rex uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery…
On July 1, 2016, Rex purchases a new automobile for $43,000. He uses the car 84% for business and drives the car as follows: 12,000 miles in 2016, 30,000 miles in 2017, 33,600 miles in 2018, and 24,000 miles in 2019. Determine Rex's basis in the business portion of the auto as of January 1, 2020, under the following assumptions: If required, round your computations to the nearest dollar. a.  Rex uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2016: $ 2017: $ 2018: $ 2019: $ Rex's adjusted basis in the auto on January 1, 2020, is $ b.  Rex uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery limitation for an auto placed in service in 2016 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).] Compute his…

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Individual Income Taxes

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