Lax LLC purchased only one asset during the current year (a full 12-month tax year). On August 26 Lax placed in service computer equipment (five-year property) with a basis of $28,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). Question 1 options: $4,458 None of the choices are correct. $4,600 $5,600 $3,600

Lax LLC purchased only one asset during the current year (a full 12-month tax year). On August 26 Lax placed in service computer equipment (five-year property) with a basis of $28,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). Question 1 options: $4,458 None of the choices are correct. $4,600 $5,600 $3,600

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 44P

See similar textbooks

Similar questions

Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is 1,000 and for income tax purposes is 2,000. Turnip is subject to a 30% enacted future tax rate. Prepare a schedule to compute Turnips (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year.
Arlington LLC purchased an automobile for $76,000 on July 5, 2021. What is Arlington's depreciation deduction for 2021 if its business-use percentage is 76 percent? (lgnore any possible bonus depreciation.) (Use Exhibit 10-10.) Multiple Choice $5,825 $7,600 $7,676 $11,400 None of the choices are correct.
Frazier LLC placed in service on June 19, 2021 computer equipment (5-year property) with a basis of $2,740,000. Assume that Frazier has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including § 179 expensing (but ignoring bonus depreciation). (Use MACRS Table 1.) Multiple Choice $1,292,000 $548,000 $1,050,000 $362,000
Anne LLC purchased computer equipment (five-year property) years ago for $30,000 and used the half-year convention to depreciate it. Anne LLC did not take §179 or bonus depreciation in the year it acquired the computer equipment. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense. (Use MACRS Table 1.) Multiple Choice $432. $1,728. $1,874. $3,456. None of the choices are correct.Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 6.23 5.285 Year 7 8.93 6.55 5.90 4.888 Year 8 4.46 6.55 5.90 4.522…
Compute the charitable contribution deduction (ignoring the percentage limitation) for each of the following C corporations. If required, round your answers to nearest dollar. a. Amber Corporation donated inventory of clothing (basis of $128,500, fair market value of $160,625) to a qualified charitable organization that operates homeless shelters. X
es On April 1, 2024, Titan Corporation purchases office equipment for $64,000. For tax reporting, the company uses MACRS and classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value. Required: 1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. 2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. 3. In which year(s) is tax depreciation greater than financial reporting depreciation? Complete this question by entering your answers in the tabs below. Required 1 Year Calculate annual depreciation for…
Dain's Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any $179 expense (assume no bonus depreciation). Asset Purchase Date Original Basis $ 90,000 January 25 July 25 April 22 Drill bits (5-year) Drill bits (5-yoar) Commercial building 95,000 220,000 a) What is the maximum amount of $179 expense Dain may deduct for the year? b) What is Dain's maximum depreciation expense for the year (including $179 expense)? c) If the January drill bits' original basis was $2,375,000, what is the maximum amount of $179 expense Dain may deduct for the year? d) If the January drill bits' basis was $2,495,000, what is the maximum amount of $179 expense Dain may deduct for the year?
2. Noon Company purchased 7-year property on March 8, 2018 for $100,000 (this was Noon's only purchase during 2018). Noon sells the property on October 4; 2021. Determine the cost recovery for both years. Assume $179 & bonus depreciation were NOT taken in 2018. e mav 2018: borime u 000.04 akesb ss sT 00.0002 lo 1SOS 2021: 000
ASAP
1. A special manufacturing and handling device was purchased by Alfonso Manufacturing for $200,000 and is depreciated over MACRS. CFBT is estimated to amount to $800,000 for the first 2 years followed by $600,000 thereafter until the asset is retained. The effective tax rate, Te is 35% and interest is 10% per year. In present worth dollars determine the CFAT and determine if it was a viable purchase. (Note answer must be in a tabular format)
Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,470,500 on June 6, 2021. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus depreciation). (Use MACRS Table 1.) (Round final answer to the nearest whole number.) Multiple Choice $1,050,000 $498,864 $467,426 $666,926 None of the choices are correct.
1. During 2018, Axel Corporation purchases machinery (5-year property) for $120,000 and decides not to take a Section 179 deduction. a. Compute maximum tax depreciation for the machinery for 2018-2023. b. Compute maximum tax depreciation for 2018-2023 if Axel does not take Sec. 179 deduction and elects out of 100% bonus. 2. During 2018, Diamonds Inc. purchases only one asset: equipment (7-year property) for $1,600,000. Diamonds had taxable income of $750,000 in 2018 and takes the maximum Section 179 deduction and elects out of 100% bonus. Compute maximum tax depreciation for 2018-2025.