After an unseasonably hot summer, Willow received a call from her tenant that the AC was no longer working on the rental property she owned. After calling out the repair service, it was determined that she needed a new HVAC unit. Willow placed the order for the new unit on October 25, 2022. It was on back order and could not be delivered to the rental property until December 22, 2022. Because of the holiday, it was not installed until January 6, 2023. On which date would the HVAC unit be considered “placed in service” for depreciation purposes?

After an unseasonably hot summer, Willow received a call from her tenant that the AC was no longer working on the rental property she owned. After calling out the repair service, it was determined that she needed a new HVAC unit. Willow placed the order for the new unit on October 25, 2022. It was on back order and could not be delivered to the rental property until December 22, 2022. Because of the holiday, it was not installed until January 6, 2023. On which date would the HVAC unit be considered “placed in service” for depreciation purposes?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter5: Deductions For And From Agi

Section: Chapter Questions

Problem 30P

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After an unseasonably hot summer, Willow received a call from her tenant that the AC was no longer working on the rental property she owned. After calling out the repair service, it was determined that she needed a new HVAC unit. Willow placed the order for the new unit on October 25, 2022. It was on back order and could not be delivered to the rental property until December 22, 2022. Because of the holiday, it was not installed until January 6, 2023. On which date would the HVAC unit be considered "placed in service" for depreciation purposes? October 25, 2022 O December 22, 2022 O January 6, 2023
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Jerry Smith’s residential air conditioning (AC) system has not been able to keep his house cool enough in 90◦F weather. He called his local AC maintenance person, who discovered a leak in the evaporator. The cost to recharge the AC unit is $40 for gas and $45 for labor, but the leak will continue and perhaps grow worse. The AC person cautioned that this service would have to be repeated each year unless the evaporator is replaced. A new evaporator would run about $800–$850. Jerry reasons that fixing the leak in the evaporator on an annual basis is the way to go. “After all, it will take 10 years of leak repairs to equal the evaporator’s replacement cost.” Comment on Jerry’s logic. What would you do?
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In early 2019, Cyndey Walters received a $2 million settlement as a result of suffering serious injuries in an accident on a construction site. As a result, she immediately quit her job as a plumber for a construction company and began to search for rundown houses in her neighbour hood that she could buy at a low price. Her objective was to bring her houses up to code (i.e., in accordance with building regulations) and then rent them to individuals who could not afford adequate housing. Cyndey charged just enough rent to cover the expenses of each house. By March 2020, she owned five houses that were rented to five families. She continued working part time as a plumber while she took courses toward a degree in social work. Cyndey came from a large family, many members of which were involved in construction. She called on her family for help when her tenants needed services, and they gave her a family dis- count for their services. In June 2021, she learned that the owner of two…
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Angela purchased a rental property on August 1, 2021, for $172,400. She hired an architect to draw up remodeling plans, and then spent 55 hours doing the actual demolition and construction herself. Which of the following expenses affect her adjusted basis? Mortgage insurance premiums of $1,150, included at closing. $275 in appraisal fees paid at closing and required by her lender. The fair market value of remodeling labor done by Angela. [$35/hour x 55 hours = $1,925] Fees charged by the architect, totaling $975. Philip purchased a small apartment complex in 2021. He paid $375,000 for it; there was no specified value for the land in the contract. The most recent real estate assessment had the property valued at $350,000, of which $308,000 was for the building and $42,000 for the land.Assuming no other expenses, what is Philip's basis in the apartment building? $308,000 $330,000 $350,000 $375,000 please help me
Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2019, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable: Damaged Items FMV Just Prior to Damage Original Item Cost (Basis) Antique poster bed $ 6,000 $ 5,000 Pool table 7,000 11,000 Flat-screen TV 700 2,500 Required: Their homeowner's insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,700. Their AGI for 2019 was $50,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2019?
Jane Doe moved from Victoria to Vancouver for an internal transfer requested by her employer on October 1, 2020. Prior to relocation, she spent $1000 on a house hunting trip to Vancouver and ended up signing a one-year lease for an apartment in Vancouver after an unsuccessful bid for a house. The cost of sales of her old residence in Victoria, including legal fees and brokerage fees, totaled $7,200. The actual moving costs were $13,000. Jane’s employer agreed to pay $8,000 for her moving costs. Jane’s salary for 2020 was $48,000 (assume her monthly salary is the same throughout the year). Required: Calculate Jane’s maximum moving expense deduction for 2020. Please also indicate the carry forward amount, if any.
Dr Greg Marshall acquired a house in Windsor under a contract dated 1 January 2011 for $560,000. He also paid $15,000 in legal fees and stamp duty upon settlement on 31 January 2011. Dr Marshall used the house as the main residence for himself and his family. Five months later on 1 June 2011, Dr Marshall decided to operate a doctor’s surgery at his home due to a falling out with his partners at the local surgery as well as his desire to spend more time at home with his family. A downstairs room was modified for this purpose on the same date. The room represented 10% of the total floor area of the house. The real estate agent estimated the market value of the home at 1 June 2011 was $600,000 Five years later, on 1 June 2016, Dr Marshall was invited to join a new larger practice focusing on holistic and natural medicines and therefore decided to close his home surgery on 31 May 2016. He then converted the surgery space back into a bedroom for his eldest son. Dr Marshall continued…
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