Lars acquired a new network system on June 5, 2021 (five-year class property), for $62,000. She expects taxable income from the business will always be about $180,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2021 for $360,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2021.

Lars acquired a new network system on June 5, 2021 (five-year class property), for $62,000. She expects taxable income from the business will always be about $180,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2021 for $360,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2021.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 53P

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In March 2019, Helen Carlon acquired used equipment for her business at a cost of 300,000. The equipment is five-year property for regular tax depreciation purposes. a. If Helen depreciates the equipment using the method that will produce the greatest deduction for 2019 for regular income tax purposes, what is the amount of the AMT adjustment? b. Draft a letter to Helen regarding the choice of depreciation methods. Helens address is 500 Monticello Avenue, Glendale, AZ 85306.
Alice purchases a rental house on August 22,2019, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2019 using MACRS? $2,373 $1,970 $1,364 $1,061 $1,009
Lars acquired a new network system on June 5, 2023 (five-year class property), for $69,000. She expects taxable income from the business will always be about $215,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2023 for $430,000. (Use Table 6A-1) Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2023. TABLE 6A-1 General Depreciation System: 200% or 150% Declining Balance Switching to Straight-Line* Half-Year Convention Recovery Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 1 33.33 20.00 14.29 10.00 5.00 3.750 2 44.45 32.00 24.49 18.00 9.50 7.219 3 14.81 19.20 17.49 14.40 8.55 6.677 4 7.41 11.52 12.49 11.52 7.70 6.177 5 11.52 8.93 9.22 6.93 5.713 6 5.76 8.92 7.37 6.23 5.285 7 8.93 6.55 5.90 4.888 8 4.46 6.55 5.90 4.522 9 6.56 5.91 4.462 10 6.55 5.90 4.461 11 3.28 5.91 4.462 12 5.90 4.461 13…
Alice purchases a rental house on July 22, 2021, for a cost of $174,000. Of this amount, $100,000 is considered to be allocable to the cost of the home, with the remaining $74,000 allocable to the cost of the land. What is Alice's maximum depreciation deduction for 2021 using MACRS?
Aaron has a successful business with $50,000 of income in 2020. He purchased a new 7-year MACRS property with a cost of $7,000. For tax purposes, what cost recovery will provide the largest amount Aaron can deduct in 2020 for the new asset? a. Typical MACRS depreciation b. Bonus depreciation c. Section 179 immediate expensing d. Bonus and Section 179 will result in an equal amount e. MACRS, bonus, and Section 179 will all result in an equal amount
Aaron has a successful business with $50,000 of income in 2020. He purchased a new 7-year MACRS property with a cost of $7,000. For tax purposes, what cost recovery will provide the largest amount Aaron can deduct in 2020 for the new asset? (Please select the best option) a. Typical MACRS depreciation b. Bonus depreciation c. Section 179 immediate expensing d. Bonus and Section 179 will result in an equal amount e. MACRS, bonus, and Section 179 will all result in an equal amount
Lars acquired a new network system on June 5, 2021 (five-year class property), for $62,000. She expects taxable income from the business will always be about $180,000 without regard to the §179 election. Lars will elect §179 expensing. She also acquired seven-year property in July 2021 for $360,000. Required: Determine Lars’s maximum cost recovery deduction with respect to her purchases in 2021.
L0.2 Andre acquired a computer on March 3, 2019, for $2,800. He elects the straight-line method for cost recovery.Andre does not elect immediate expensing under § 179.He does not claim any available additional fast-year depreciation. Calculate Andre's cost recovery deduction for the computer for tax years 2019 and 2020.
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