Compute regular depreciation for the following qualified assets. Ignore bonus depreciation and section 179. a.) Business...

Compute regular depreciation for the following qualified assets. Ignore bonus depreciation and section 179.

a.) Business equipment purchased in February for $40,000 which has salvage value of $4,000.
b.) Business car purchased in May for 22,000 which has a salvage value of $3,000.
c.) Business equipment purchased in May for $150,000 has a salvage value of $15,000.
d.) Business car purchased in April for $42,000 with a salvage value of $5,000.
e.) Compute depreciation for residential real estate purchased in January for $390,000 with a salvage value of $50,000.

Solutions

Expert Solution

Answer:
1	Business equipment purchased in February for $40,000 which has salvage value of $4,000.

	Purchase price	40000
	period of depreciation	11 months
	rate of depreciation	40%

	Purchase price	40000
	less: salvage value	4000
	depreciable value	36000

	depreciation(3600040%11/12)	13200

2	Business car purchased in May for 22,000 which has a salvage value of $3,000.

	Purchase price	22000
	period of depreciation	8 months
	rate of depreciation	15%

	Purchase price	22000
	less: salvage value	3000
	depreciable value	19000

	depreciation(1900015%8/12)	1900

3	Business equipment purchased in May for $150,000 has a salvage value of $15,000.

	Purchase price	150000
	period of depreciation	8 months
	rate of depreciation	40%

	Purchase price	150000
	less: salvage value	15000
	depreciable value	135000

	*depreciation(13500040%8/12)*	36000

4	Business car purchased in April for $42,000 with a salvage value of $5,000.

	Purchase price	42000
	period of depreciation	9 months
	rate of depreciation	15%

	Purchase price	42000
	less: salvage value	5000
	depreciable value	37000

	*depreciation(3700015%9/12)*	4162.5

5	Compute depreciation for residential real estate purchased in January for $390,000 with a salvage value of $50,000.

	Purchase price	390000
	period of depreciation	12 months
	rate of depreciation

	depreciation exp for the year	14181.82

ekkarill92 answered 4 months ago

Next > < Previous

Related Solutions

Jane Co. Inc is thinking of using either section 179 depreciation or bonus depreciation. What is...

Jane Co. Inc is thinking of using either section 179 depreciation or bonus depreciation. What is the benefit of using bonus depreciation over section 179 depreciation. One of following is right answer: a. You can use bonus depreciation to create a loss. b. You cannot use bonus depreciation to create a loss. c. You can use bonus depreciation to off set section 179 income. d. You can use section 179 depreciation to create a loss. Justify your choice.

Explain fully the difference in bonus depreciation (along with limits) and Section 179 and how these...

Explain fully the difference in bonus depreciation (along with limits) and Section 179 and how these two interrelate.

Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (ignore §179 expense and bonus...

Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1 and Table 2.) 2018 Date Placed Original Asset in Service Basis Machinery October 25 $ 102,000 Computer equipment February 3 34,000 Used delivery truck* August 17 47,000 Furniture April 22 190,000 *The delivery truck is not a luxury automobile a. What is the allowable MACRS depreciation on Evergreen’s property in the current year assuming Evergreen does...

How the section 179 and bonus depreciation deductions work. Include in your discussion: What types of...

How the section 179 and bonus depreciation deductions work. Include in your discussion: What types of property are eligible under each? Are there any limits on the deduction? If so, can you carry over any amounts to future years? What will happen to the bonus depreciation deduction in future years? Why would Congress implement these types of deductions? Can you use both at the same time? If so, how does that work?

In this assignment, assume that the Sec. 179 and bonus depreciation tax apply to the 2020...

In this assignment, assume that the Sec. 179 and bonus depreciation tax apply to the 2020 tax year where applicable. For a-d, determine the total depreciation amount for 2020 assuming the taxpayer opted out of Sec. 179 and bonus if they were available in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Details at purchase Total depreciation a...

HOW TO ENTER PRIOR ACCUMULATED DEPRECIATION 179 BONUS ON CURRENT TAX YEAR

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and...

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table2,and Table 5.) Date Placed Original Asset in Service Basis Machinery 25-Oct $ 100,000 Computer equipment 03-Feb $ 40,000 Used delivery truck* 17-Mar $ 53,000 Furniture 22-Apr $ 180,000 Total $ 373,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new flooring (qualified improvement property) to its office...

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and...

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table2,and Table 5.) Asset Date Placed in Service Original Basis Machinery October 25 $110,000 Computer Equipment February 3 $50,000 Used delivery Truck* March 17 $63,000 Furniture April 22 $190,000 Total $413,000 *the delivery truck is not a luxury automobile In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building...

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation ($179, bonus, or MACRS)...

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation ($179, bonus, or MACRS) and acquired the following assets during the year: (Use MACRS Tables) Placed In Asset Service Basis Office Furniture March 20 $600,000 Question b. If Woolard elects the maximum amount of $179 for the year, what is the amount of deductible $179 expense for the year? What is the total depreciation expense that Woolard's $179 carryforward amount to next year, if any? c. Woolard is...

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation deductions (§179, bonus, or...

Woolard Inc. has taxable income in 2017 of $150,000 before any depreciation deductions (§179, bonus, or MACRS) and acquired the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Asset Placed In Service Basis Office furniture (used) March 20 $ 590,000 a. If Woolard elects $50,000 of §179, what is Woolard’s total depreciation deduction for the year?...

Subjects