Kim Corporation,a calendar year taxpayer,has manufacturing facilities in States A and B.A summary of Kim's property holdings follows. Beginning of Year State A State B Total Inventory $ 300,000 $ 200,000 $ 500,000 Plant and equipment 2,200,000 1,500,000 3,700,000 Accumulated depreciation: plant and equipment (1,200,000) (500,000) (1,700,000) Land 500,000 600,000 1,100,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (200,000) (50,000) (250,000) End of Year State A State B Total Inventory $ 400,000 $ 100,000 $ 500,000 Plant and equipment 2,500,000 1,200,000 3,700,000 Accumulated depreciation: plant and equipment (1,500,000) (450,000) (1,950,000) Land 600,000 400,000 1,000,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (300,000) (100,000) (400,000) *Unrelated to Kim's regular business and operations. Determine Kim's property factors for the two states.A's statutes provide that the average historical cost of business property is to be included in the property factor.B's statutes provide that the property factor is based on the average depreciated basis of in-state business property.

Question

Kim Corporation,a calendar year taxpayer,has manufacturing facilities in States A and B.A summary of Kim's property holdings follows. Beginning of Year State A State B Total Inventory $ 300,000 $ 200,000 $ 500,000 Plant and equipment 2,200,000 1,500,000 3,700,000 Accumulated depreciation: plant and equipment (1,200,000) (500,000) (1,700,000) Land 500,000 600,000 1,100,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (200,000) (50,000) (250,000) ​ End of Year State A State B Total Inventory $ 400,000 $ 100,000 $ 500,000 Plant and equipment 2,500,000 1,200,000 3,700,000 Accumulated depreciation: plant and equipment (1,500,000) (450,000) (1,950,000) Land 600,000 400,000 1,000,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (300,000) (100,000) (400,000) *Unrelated to Kim's regular business and operations. Determine Kim's property factors for the two states.A's statutes provide that the average historical cost of business property is to be included in the property factor.B's statutes provide that the property factor is based on the average depreciated basis of in-state business property.

Quizplus · Accepted Answer

The Answer of Kim Corporation,a calendar year taxpayer,has manufacturing facilities in States A and B.A summary of Kim's property holdings follows. Beginning of Year State A State B Total Inventory $ 300,000 $ 200,000 $ 500,000 Plant and equipment 2,200,000 1,500,000 3,700,000 Accumulated depreciation: plant and equipment (1,200,000) (500,000) (1,700,000) Land 500,000 600,000 1,100,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (200,000) (50,000) (250,000) ​ End of Year State A State B Total Inventory $ 400,000 $ 100,000 $ 500,000 Plant and equipment 2,500,000 1,200,000 3,700,000 Accumulated depreciation: plant and equipment (1,500,000) (450,000) (1,950,000) Land 600,000 400,000 1,000,000 Rental property* 900,000 300,000 1,200,000 Accumulated depreciation: rental property (300,000) (100,000) (400,000) *Unrelated to Kim's regular business and operations. Determine Kim's property factors for the two states.A's statutes provide that the average historical cost of business property is to be included in the property factor.B's statutes provide that the property factor is based on the average depreciated basis of in-state business property.

Kim Corporation,a Calendar Year Taxpayer,has Manufacturing Facilities in States a and B.A