On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his...
On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $43,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179.
Calculate Jay's depreciation deduction for 2018 assuming bonus depreciation.
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On September 14, 2018, Jay purchased a passenger automobile that
is used 75 percent in his...
Problem 8-8 Modified Accelerated Cost Recovery System (MACRS), Election to Expense, Listed Property, Limitation on Depreciation...
Problem 8-8 Modified Accelerated Cost Recovery System (MACRS), Election to Expense, Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 8.2, 8.3, 8.4, 8.5) During 2018, William purchases the following capital assets for use in his catering business: New passenger automobile (September 30) $51,500 Baking equipment (June 30) 6,500 Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a...
During 2018, William purchases the following capital assets for use in his catering business: New passenger...
During 2018, William purchases the following capital assets for use in his catering business: New passenger automobile (September 30) $52,900 Baking equipment (June 30) 15,870 Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate...
Patrick purchased a used passenger automobile on June 1, 2018. He paid $19,000 for the automobile....
Patrick purchased a used passenger automobile on June 1, 2018. He paid $19,000 for the automobile. During 2018, he uses the automobile 75 percent of the time for business. Patrick wishes to claim the maximum amount of depreciation possible (no bonus depreciation or election to expense). a. Calculate Patrick's depreciation expense on the automobile for 2018. b. Calculate Patrick's depreciation expense on the automobile for 2019, assuming the same 75 percent business use.
On October 21, 2018, Jay purchased a commercial building. The cost basis assigned to the building...
On October 21, 2018, Jay purchased a commercial building. The cost basis assigned to the building is $700,000. Jay also owns a residential apartment building he purchased on June 15, 2017 with a cost basis of $500,000. a. Calculate Jay's total depreciation deduction for the buildings for 2018, using MACRS. b. Calculate Jay's total depreciation deduction for the commercial building for 2019, using MACRS.
21. Brenda bought in 2018 a passenger automobile for $15,000. The automobile is used 100% for...
21. Brenda bought in 2018 a passenger automobile for $15,000. The automobile is used 100% for qualified business purposes. What is the maximum depreciation expense deduction, including bonus depreciation, assuming the election to expense is not made? a. b. c. d. e. $11,160 $3,160 $9,000 $15,000 None of the above. The answer is _________
Problem 8-3 Modified Accelerated Cost Recovery System (MACRS), Election to Expense (Section 179) (LO 8.2, LO...
Problem 8-3 Modified Accelerated Cost Recovery System (MACRS), Election to Expense (Section 179) (LO 8.2, LO 8.3) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2018. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,000 and an estimated useful life of 5 years. Assume half-year convention...
In 2016, Olga Co. purchased a piece of business-use equipment for $100,000. The equipment has a...
In 2016, Olga Co. purchased a piece of business-use equipment for $100,000. The equipment has a 7-year MACRS GDS recovery period and is depreciated under MACRS GDS (no SL election). The equipment was placed in service on September 10, 2016. This was the only asset that Olga Co. placed in service in 2016. Olga Co. did not elect Section 179 deduction and elected out of Section 168(k) bonus depreciation. What is Olga Co.'s depreciation deduction for 2016 (the year the...
28. On August 1, 2018, David purchased manufacturing equipment for use in his business. The equipment...
28. On August 1, 2018, David purchased manufacturing equipment for use in his business. The equipment cost $14,000 and has an estimated useful life and MACRS class life of 7 years. a. Calculate the amount of depreciation on the manufacturing equipment for 2018 using the accelerated MACRS method and no election to expense or use bonus depreciation is made. b. Calculate the amount of depreciation on the manufacturing equipment for 2018 using the accelerated MACRS method and bonus depreciation used...
19. On May 26, 2014, Jamal purchased machinery for $30,000 to be used in his business....
19. On May 26, 2014, Jamal purchased machinery for $30,000 to be used in his business. He did not elect to expense the equipment under $179 or the bonus. On October 10, 2018, he sells the machinery to a scrap metal dealer. What is his cost recovery deduction for 2018 rounded to the nearest dollar? A) $0. B) $1,340. C) $2,679. D) $4,287. E) None of the above.
Raul purchased an automobile for his business in 2019 for $80,000 and wanted to get the...
Raul purchased an automobile for his business in 2019 for $80,000 and wanted to get the maximum possible depreciation deduction each year. He did not elect out of bonus depreciation, and so he took $18,100 of cost recovery deductions in 2019. He did this correctly, but he filed his own taxes, and now he’s coming to you for help with tax year 2020. He’s not sure what his basis is now, and how he calculates depreciation for 2020 and beyond....
Problem 8-3 Modified Accelerated Cost Recovery System (MACRS), Election to Expense (Section 179) (LO 8.2, LO 8.3) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2018. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,000 and an estimated useful life of 5 years. Assume half-year convention...
28. On August 1, 2018, David purchased manufacturing equipment for use in his business. The equipment cost $14,000 and has an estimated useful life and MACRS class life of 7 years. a. Calculate the amount of depreciation on the manufacturing equipment for 2018 using the accelerated MACRS method and no election to expense or use bonus depreciation is made. b. Calculate the amount of depreciation on the manufacturing equipment for 2018 using the accelerated MACRS method and bonus depreciation used...
19. On May 26, 2014, Jamal purchased machinery for $30,000 to be used in his business. He did not elect to expense the equipment under $179 or the bonus. On October 10, 2018, he sells the machinery to a scrap metal dealer. What is his cost recovery deduction for 2018 rounded to the nearest dollar? A) $0. B) $1,340. C) $2,679. D) $4,287. E) None of the above.
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