Required information [The following information applies to the questions displayed below.] Dain's Diamond Bit Drilling purchased the following assets this year. Original Basis Asset Drill bits (5-year) Drill bits (5-year) Commercial building Purchase Date January 25 $ 90,000 July 25 95,000 April 22 220,000 Assume its taxable income for the year was $53,000 for purposes of computing depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Leave no answer blank. Enter zero if applicable. a. What is the maximum amount of $179 expense Dain's may deduct for the year? $179 expense
Required information [The following information applies to the questions displayed below.] Dain's Diamond Bit Drilling purchased the following assets this year. Original Basis Asset Drill bits (5-year) Drill bits (5-year) Commercial building Purchase Date January 25 $ 90,000 July 25 95,000 April 22 220,000 Assume its taxable income for the year was $53,000 for purposes of computing depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Leave no answer blank. Enter zero if applicable. a. What is the maximum amount of $179 expense Dain's may deduct for the year? $179 expense
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter5: Business Deductions
Section: Chapter Questions
Problem 51P
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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