Question

In: Accounting

Juan acquires a new 5-year class asset on March 14, 2020, for $200,000. This is the...

Juan acquires a new 5-year class asset on March 14, 2020, for $200,000. This is the only asset Juan acquired during the year. He does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation. On July 15, 2021, Juan sells the asset.

Click here to access depreciation table to use for this problem.

a. Determine Juan's cost recovery for 2020.
$

b. Determine Juan's cost recovery for 2021.
$

On August 2, 2020, Wendy purchased a new office building for $3,800,000. On October 1, 2020, she began to rent out office space in the building. On July 15, 2024, Wendy sold the office building.

If required, round your answers to the nearest dollar.

Click here to access the depreciation table to use for this problem.

a. What MACRS convention applies to the new office building?
Half-year

b. What is the life of the asset for MACRS?
15 years

c. Determine Wendy's cost recovery deduction for 2020 and 2024.
2020: $
2024: $

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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