Question 1

Bonnie Jo used two assets during the current year. The first was computer equipment with an original basis of $15,000, currently in the second year of depreciation anddepreciated under the half-year convention. This asset was disposed of on October 1^st of the current year. The second was furniture with an original basis of $24,000, placed in service during the first quarter, currently in the fourth year of depreciation, anddepreciated under the mid-quarter convention. What is Bonnie Jo's depreciation deduction for the current year? (Round final answer to the nearest whole number.)(Use MACRS Table 1 and Table 2.)

Accepted Answer

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Question 2

Kristine sold two assets on March 20 ^th of the current year. The first was machinery with an original basis of $51,000, currently in the fourth year of depreciation, anddepreciated under the half-year convention. The second was furniture with an original basis of $16,000, placed in service during the fourth quarter, currently in the third year of depreciation, anddepreciated under the mid-quarter convention. What is Kristine's depreciation deduction for the current year if the depreciation recovery period is seven years? (Use MACRS Table 1 and Table 2 and Exhibit 10-6.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of Kristine sold two assets on March 20...

Question 3

During April of the current year, Ronen purchased a warehouse that he used for business purposes. The basis was $1,600,000. Calculate the maximum depreciation deduction during the current year. (Use MACRS Table 5.)

Accepted Answer

The answer of During April of the current year, Ronen...

Question 4

Timothy purchased a new computer for his consulting practice on October 15 ^th of the current year. The basis of the computer was $4,000. During the Thanksgiving holiday, he decided the computer didn't meet his business needs and gave it to his college-aged son in another state. The computer was never used for business purposes again. Timothy had $50,000 of taxable income before depreciation. What is Timothy's total cost recovery deduction with respect to the computer during the current year?

Accepted Answer

The answer of Timothy purchased a new computer for his...

Question 5

Northern LLC only purchased one asset this year. In 2020, Northern LLC placed in service on September 6^th machinery and equipment (seven-year property)with a basis of $3,150,000. Assume that Northern has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignore any potential bonus expensing). (Use MACRS Table 1.)

Accepted Answer

The answer of Northern LLC only purchased one asset this...

Question 6

Amit purchased two assets during the current year.On April 16^th Amit placed in service computer equipment (five-year property)with a basis of $5,000 and on September 9^th placed in service furniture (seven-year property)with a basis of $20,000. Calculate the maximum depreciation deduction (ignoring §179 and bonus depreciation). (Use MACRS Table 1.)

Accepted Answer

The answer of Amit purchased two assets during the current...

Question 7

Columbia LLC only purchased one asset this year. Columbia LLC placed in service on July 9, 2020, machinery and equipment (seven-year property)with a basis of $2,750,000. Assume that Columbia has sufficient income to avoid any limitations. Calculate the maximum depreciation deduction, including §179 expensing (but ignoring bonus depreciation)for the year. (Use MACRS Table 1.)

Accepted Answer

The answer of Columbia LLC only purchased one asset this...

Question 8

Yasmin purchased two assets during the current year. On May 26^th Yasmin placed in service computer equipment (five-year property)with a basis of $10,000 andon December 9^th placed in service machinery (seven-year property)with a basis of $10,000. Calculate the maximum depreciation deduction (ignoring §179 and bonus depreciation). (Use MACRS Table 2.)

Accepted Answer

The answer of Yasmin purchased two assets during the current...

Question 9

Yasmin purchased two assets during the current year. On May 26 ^thYasmin placed in service computer equipment (five-year property)with a basis of $13,000 and on December 9 ^thplaced in service machinery (seven-year property)with a basis of $13,000. Calculate the maximum depreciation deduction (ignoring §179 and bonus depreciation). (Use MACRS Table 2.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of Yasmin purchased two assets during the current...

Question 10

An office building was purchased several years agoon December 9th for $2,500,000. The purchase price was allocated as follows: building $1,900,000, landscaping $100,000, and land $500,000. During the current year, the 10^th year, the building was sold on March 10^th. Calculate the maximum depreciation deduction for the real property during the current year, rounded to the nearest whole number. (Use MACRS Table 5.)

Accepted Answer

The answer of An office building was purchased several years...

Question 11

Alexandra purchased a $55,000 automobile during 2020. The business use was 70 percent. What is the allowable depreciation for the current year? (Ignore any possible bonus depreciation.)(Use Exhibit 10-10.)

Accepted Answer

The answer of Alexandra purchased a $55,000 automobile during 2020....

Question 12

Olney LLC only purchased one asset this year. Olney LLC placed in service on July 19, 2020, machinery and equipment (seven-year property)with a basis of $1,330,000. Assume that Olney has sufficient income to avoid any limitations. Calculate the maximum depreciation deduction, including §179 expensing (but ignoring bonus depreciation). (Use MACRS Table 1.)

Accepted Answer

The answer of Olney LLC only purchased one asset this...

Question 13

BoxerLLC has acquired various types of assets recently used 100 percent in its trade or business. Below is a list of assets acquired during 2019 and 2020:
  Boxer did not elect §179 expense and elected out of bonus depreciation in 2019, but would like to take advantage of the §179 expense and bonus depreciation for 2020 (assume that taxable income is sufficient). Calculate Boxer's maximum depreciation deduction for 2020. (Use MACRS Table 1, MACRS Table 5, and Exhibit 10-10.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of BoxerLLC has acquired various types of assets...

Question 14

During August of the prior year, Julio purchased an apartment building that he used as a rental property. The basis was $1,400,000. Calculate the maximum depreciation deduction during the current year. (UseMACRS Table 3.)

Accepted Answer

The answer of During August of the prior year, Julio...

Question 15

During April of the current year, Ronen purchased a warehouse that he used for business purposes. The basis was $1,604,000. Calculate the maximum depreciation deduction during the current year. (Use MACRS Table 5.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of During April of the current year, Ronen...

Question 16

Northern LLC only purchased one asset this year. In 2020, Northern LLC placed in service on September 6^t^h machinery and equipment (seven-year property)with a basis of $3,230,000. Assume that Northern has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignore any potential bonus expensing). (Use MACRS Table 1.)

Accepted Answer

The answer of Northern LLC only purchased one asset this...

Question 17

Kristine sold two assets on March 20th of the current year. The first was machinery with an original basis of $60,000, currently in the fourth year of depreciation, and depreciated under the half-year convention. The second was furniture with an original basis of $25,000, placed in service during the fourth quarter, currently in the third year of depreciation, and depreciated under the mid-quarter convention. What is Kristine's depreciation deduction for the current year if the depreciation recovery period is seven years? (Use MACRS Table 1 and Table 2 and Exhibit 10-6.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of Kristine sold two assets on March 20th...

Question 18

Reid acquired two assets in 2020: on August 6thhe acquired computer equipment (five-year property)with a basis of $1,040,000 andon November 9th he acquired machinery (seven-year property)with a basis of $1,040,000. Assume that Reid has sufficient income to avoid any limitations. Calculate the maximum depreciation deduction, including §179 expensing (but not bonus depreciation). (Use MACRS Table 1, Table 2.)

Accepted Answer

The answer of Reid acquired two assets in 2020: on...

Question 19

Alexandra purchased a $56,300 automobile during 2020. The business use was 60 percent. What is the allowable depreciation for the current year? (Ignore any possible bonus depreciation.)(Use Exhibit 10-10.)

Accepted Answer

The answer of Alexandra purchased a $56,300 automobile during 2020....

Question 20

Phyllis purchased $8,000 of specialized audio equipment that she uses in her business regularly. Occasionally, she uses the equipment for personal use. During the first year, Phyllis used the equipment for business use 70 percent of the time; however, during the current (second)year, the business use fell to 40 percent. Assume that the equipment is seven-year MACRS property and is under the half-year convention. Assume the ADS recovery period is 10 years. What is the depreciation allowance for the current year? (Use MACRS Table 1.)(Round final answer to the nearest whole number.)

Accepted Answer

The answer of Phyllis purchased $8,000 of specialized audio equipment...

Quiz 10: Property Acquisition and Cost Recovery

During April of the current year, Ronen purchased a warehouse that he used for business purposes. The basis was $1,600,000. Calculate the maximum depreciation deduction during the current year. (Use MACRS Table 5.)

Alexandra purchased a $55,000 automobile during 2020. The business use was 70 percent. What is the allowable depreciation for the current year? (Ignore any possible bonus depreciation.)(Use Exhibit 10-10.)

During August of the prior year, Julio purchased an apartment building that he used as a rental property. The basis was $1,400,000. Calculate the maximum depreciation deduction during the current year. (UseMACRS Table 3.)

During April of the current year, Ronen purchased a warehouse that he used for business purposes. The basis was $1,604,000. Calculate the maximum depreciation deduction during the current year. (Use MACRS Table 5.)(Round final answer to the nearest whole number.)

Alexandra purchased a $56,300 automobile during 2020. The business use was 60 percent. What is the allowable depreciation for the current year? (Ignore any possible bonus depreciation.)(Use Exhibit 10-10.)