Question 1

On May 1,2008,Empire Properties Corp.,a calendar year taxpayer,purchased an apartment building for $1,000,000,of which $400,000 was allocable to the land.The corporation sold the property this year on September 23,2013.
a.What was the corporation's depreciation for the building,using statutory percentages under MACRS for 2008?
b.What was the corporation's depreciation for the building,using statutory percentages under MACRS for 2013?

Accepted Answer

The answer of On May 1,2008,Empire Properties Corp.,a calendar year...

Question 2

On June 30,2014,Temika purchased office furniture (7-year property)costing $22,000 and computers (5-year property)with a cost of $19,000.She uses Sec.179.Her business income is $190,000 without considering Sec.179.How should she allocate the 179 election in order to maximize her total cost recovery deductions (depreciation and Sec.179)for 2014 ?

Accepted Answer

The answer of On June 30,2014,Temika purchased office furniture (7-year...

Question 3

Greta,a calendar-year taxpayer,acquires 5-year tangible personal property in 2014 and places the property in service on the following schedule:
  Greta elects to expense the maximum under Section 179,and selects the property placed into service on November 8.Her business 's taxable income before section 179 is $190,000.What is the total cost recovery deduction (depreciation and Sec.179)for 2014?

Accepted Answer

The answer of Greta,a calendar-year taxpayer,acquires 5-year tangible personal property...

Question 4

Bert,a self-employed attorney,is considering either purchasing or leasing a $50,000 automobile for use in his business.What are the issues he should consider in making his decision?

Accepted Answer

The answer of Bert,a self-employed attorney,is considering either purchasing or...

Question 5

Mehmet,a calendar-year taxpayer,acquires 5-year tangible personal property in 2014 and does not use Sec.179. Mehmet places the property in service on the following schedule:
  What is the total depreciation for 2012?

Accepted Answer

The answer of Mehmet,a calendar-year taxpayer,acquires 5-year tangible personal property...

Question 6

Stellar Corporation purchased all of the assets of Bellavia Company as of January 1 this year for $1 million. Included in the assets acquired are the following intangible assets:
  What is Stellar's maximum amortization deduction for the year?

Accepted Answer

The answer of Stellar Corporation purchased all of the assets...

Question 7

During the year 2014,a calendar year taxpayer,Marvelous Munchies,a chain of specialty food shops,purchased equipment as follows:
  Assume the property is all 5-year property. What is the maximum depreciation that may be deducted for the assets this year,2014,assuming the alternative depreciation system is not chosen?

Accepted Answer

The answer of During the year 2014,a calendar year taxpayer,Marvelous...

Question 8

In January of 2014,Brett purchased a Porsche for $100,000 to be used in his business. Brett drove the car 83 percent of the time for business.What is the maximum amount that Brett may deduct in 2014?

Accepted Answer

The answer of In January of 2014,Brett purchased a Porsche...

Question 9

Why would a taxpayer elect to use the alternative depreciation system rather than the MACRS rules?

Accepted Answer

The answer of Why would a taxpayer elect to use...

Question 10

Jack purchases land which he plans on developing as a golf course.The land costs $20,000,000 and the cost of clearing the land,earthmoving,constructing hazards,bunkers and greens,and installing irrigation systems will cost an additional $6,000,000.What tax issues should Jack consider?

Accepted Answer

The answer of Jack purchases land which he plans on...

Question 11

Why would a taxpayer elect to capitalize and amortize intangible drilling costs (IDCs)rather than expense such costs?

Accepted Answer

The answer of Why would a taxpayer elect to capitalize...

Question 12

Discuss the options available regarding treatment of an amount paid in excess of the FMV of an acquired company's net assets in a business combination.

Accepted Answer

The answer of Discuss the options available regarding treatment of...

Question 13

On May 1,2012,Empire Properties Corp.,a calendar year taxpayer,purchased an office building for $1,000,000,of which $400,000 was allocable to the land.The corporation sold the property this year on September 23,2014.
a.What was the corporation's depreciation for the building,using statutory percentages under MACRS for 2012?
b.What was the corporation's depreciation for the building,using statutory percentages under MACRS
for 2014?

Accepted Answer

The answer of On May 1,2012,Empire Properties Corp.,a calendar year...

Quiz 20: Depreciation cost Recovery amortization and Depletion