Question

QUESTION 1 Bonnie purchased a new business (five-year property) on March 10, 2020, at a cost of $30,000. She also purchased a new business (e-year property) on November 20, 2020, at a cost of 513,000 Bonnie did not elect to expense either of the sets under $ 179, nor did she eclect straight line cost recovery. Bonnie takes additional first-year depreciation Determine the cost recovery deduction for 2020 for these assets O $7,858 b. $9.586 O c$21.915 Od 543,000 O None of the above QUESTION 2 Cora purchased a hotel building on May 17, 2020, for 53,000,000. Dette cost recovery deduction for 2021 O a. 548.150 b.$59.520 O c. 569.000 d. 576.920 e. None of the above QUESTION During the past two years, through extensive hvertising and improved customer relations, Orange Corporation estimated that it had developed customer goodwill worth $500,000. For the current you, determine the amount of goodwill Orange Corporation may not 516,667 b. 526,667 O $33,333 O d. 5100.000 O None of the above

Answer 1

Requirement 1(Question 1):-

New business asset (5 year property) purchased in March = $30,000

New business asset (7 year property) purchased in November = $13,000

Additional depreciation during the first year of the purchase of the asset is known as the Bonus depreciation

Per IRS, a qualified business can claim bonus depreciation upto 100% of the assets placed in service during the year. The total value of the assets placed in service during the year by Bonnie is $43,000.

Hence, the additional first year depreciation/bonus depreciation for Bonnie is Option D - $43,000.

Option A , Option B and Option C are incorrect per the calcultation and observations above.

Option E is incorrect as we already have the answer at Option E.

Kindly note that i have answered the first question per the HOMEWORKLIB RULESs. Request you to post the remaining question separately so that we can answer them as well. All the best and please let me know if you have any questions via the comments section .