Question: Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, ......
Question: Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, ...
Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, 2018, Holly purchased a residential apartment building. The cost basis assigned to the building is $195,400. Holly also owns another residential apartment building that she purchased on December 15, 2018, with a cost basis of $790,000. Click here to access the depreciation tables. If required, round intermediate calculations and final answers to nearest dollar.
a. Calculate Holly's total depreciation deduction for the apartments for 2018 using MACRS.
b. Calculate Holly's total depreciation deduction for the apartments for 2019 using MACRS.
| TABLE 8.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 27.5-Year Residential Real Property | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The applicable annual percentage is (use the column
for the month in the first year the property is placed in service): |
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| *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped together in these two tables. In some instances, this will produce a difference of .001 percent when compared with the official tables. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homework Answers
Part A
Holly's total depreciation deduction for the apartments for 2018 = (195400*2.879%)+(790000*0.152%) = $6826
Part B
Holly's total depreciation deduction for the apartments for 2019 = (195400*3.636%)+(790000*3.636%) = $35829
Add Answer to:
Question: Problem 8-4 (Algorithmic) Modified
Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8,
......
TABLE 7.3 MACRS for Residential Real Property (27.5-year property) Year 1 2 3 4 Month Placed...
TABLE 7.3 MACRS for Residential Real Property (27.5-year property) Year 1 2 3 4 Month Placed in Service 5 6 7 Depreciation Rate 8 9 10 11 12 1 2-27 28 29 3.485% 3.636 1.970 0.000 3.182% 3.636 2.273 0.000 2.879% 3.636 2.576 0.000 2.576% 3.636 2.879 0.000 2.273% 3.636 3.182 0.000 1.970% 3.636 3.458 0.000 1.667% 3.636 3.636 0.152 1.364% 3.636 3.636 0.455 1.061% 3.636 3.636 0.758 0.758% 3.636 3.636 1.061 0.455% 3.636 .636 1.364 0.152% 3.636 3.636 1.667...
Alex and Betty have agreed to form a cash-basis general partnership As of January 1, 20X4,...
Alex and Betty have agreed to form a
cash-basis general partnership
As of January 1,
20X4,
Alex contributed
$175,000 cash and an apartment complex valued at $2,578,000. Alex
purchased the complex on April 12, 20X1 for $1,850,000 and has been
operating the property as a sole proprietorship. The property is
subject to a recourse debt of $775,000 that is assumed by the
partnership.
Betty contributed
$1,080,000 cash and an apartment complex valued at $2,600,000 and
investment land valued at $425,000....
Lopez acquired a building on June 1, 2015, for $8,284,900. Compute the depreciation deduction assuming the...
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In April 2019, Lenape Corporation completed security, fire and heating system improvements to existing nonresidential real...
In April 2019, Lenape Corporation completed security, fire and
heating system improvements to existing nonresidential real
property with a total cost of $1,275,000. assuming this
improvements are 39-year recovery property and qulify under section
179 deduction, calculate Lenape's total cost recovery on the
improvements for 2019. using table 7.4
In April 2019, Lenape Corporation completed security, fire, and heating system improvements to existing nonresidential real property with a total cost of $1,275,000. Assuming these improvements are 39-year recovery property and...
Problem 6-45 (LO 6-3) Rueben acquires a warehouse on September 1, 2018, for $1.5 million. On...
Problem 6-45 (LO 6-3) Rueben acquires a warehouse on September 1, 2018, for $1.5 million. On March 1, 2022, he sells the warehouse. Determine Rueben's cost recovery for 2018–2022: (Use Table 6A-8) (Do not round intermediate computations. Round your final answers to 2 decimal places. Enter your answers in dollars and not in millions of dollars.) Rueben's Cost Recovery 2018 2019 2020 2021 2022 TABLE 6A-8 General Depreciation System Straight-Line Applicable Recovery Period: 39 Years Mid-Month Convention Month In the...
Required information [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship)...
Required information [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship) has taxable income in 2019 of $240,000 before any depreciation deductions ($179, bonus, or MACRS) and placed some office furniture into service during the year. The furniture had been used previously by Liz Woolard (the owner of the business) before it was placed in service by the business. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round...
Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end)...
Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end) has 2019 taxable income of $650,000 for purposes of computing the $179 expense. The company acquired the following assets during 2019: (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,000 263,000 880,000 $ 3,413,000 b. What is the maximum total depreciation, including...
Janet purchased her personal residence in 2009 for $324,000. In January 2019, she converted it to...
Janet purchased her personal residence in 2009 for $324,000. In January 2019, she converted it to rental property. The fair market value at the time of conversion was $270,000. (Use Table 6A-6) Required: a. Determine the amount of cost recovery that can be taken in 2019. b. Determine the amount of cost recovery that could be taken in 2019 if the fair market value of the property were $416,000. (For all requirements, round your answers to 2 decimal places.) Amount...
Assume that ACW Corporation has 2018 taxable income of $1,020,000 for purposes of computing the §179...
Assume that ACW Corporation has 2018 taxable income of $1,020,000 for purposes of computing the §179 expense. The company acquired the following assets during 2018 (assume no bonus depreciation): (Use MACRS Table 1, Table 2, and Table 5). Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2) Asset Placed in Service Basis Machinery Computer equipment Delivery truck Qualified improvement property Total 12-Sep 10-Feb 21-Aug 2-Apr $ 472,000 72,800 95,000 1,382,000 $2,021,000 a. What is the...
Required information The following information applies to the questions displayed below] Assume that Timberline Corporation has...
Required information The following information applies to the questions displayed below] Assume that Timberline Corporation has 2019 taxable income of $256,000 for purposes of computing the S179 expense. It acquired the following assets in 2019: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Purchase Asset Date Basis Furniture (7-year) Computer equipment (5- year) Copier (5-year) Machinery (7-year) December 1 $ 466,eee February 28 106, еее July 15 May 22 46,eee 496,eee $1,114,eee Total Required: a-1....
TABLE 7.3 MACRS for Residential Real Property (27.5-year property) Year 1 2 3 4 Month Placed in Service 5 6 7 Depreciation Rate 8 9 10 11 12 1 2-27 28 29 3.485% 3.636 1.970 0.000 3.182% 3.636 2.273 0.000 2.879% 3.636 2.576 0.000 2.576% 3.636 2.879 0.000 2.273% 3.636 3.182 0.000 1.970% 3.636 3.458 0.000 1.667% 3.636 3.636 0.152 1.364% 3.636 3.636 0.455 1.061% 3.636 3.636 0.758 0.758% 3.636 3.636 1.061 0.455% 3.636 .636 1.364 0.152% 3.636 3.636 1.667...
Alex and Betty have agreed to form a
cash-basis general partnership
As of January 1,
20X4,
Alex contributed
$175,000 cash and an apartment complex valued at $2,578,000. Alex
purchased the complex on April 12, 20X1 for $1,850,000 and has been
operating the property as a sole proprietorship. The property is
subject to a recourse debt of $775,000 that is assumed by the
partnership.
Betty contributed
$1,080,000 cash and an apartment complex valued at $2,600,000 and
investment land valued at $425,000....
Lopez acquired a building on June 1, 2015, for $8,284,900. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate. $ b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as...
In April 2019, Lenape Corporation completed security, fire and
heating system improvements to existing nonresidential real
property with a total cost of $1,275,000. assuming this
improvements are 39-year recovery property and qulify under section
179 deduction, calculate Lenape's total cost recovery on the
improvements for 2019. using table 7.4
In April 2019, Lenape Corporation completed security, fire, and heating system improvements to existing nonresidential real property with a total cost of $1,275,000. Assuming these improvements are 39-year recovery property and...
Problem 6-45 (LO 6-3) Rueben acquires a warehouse on September 1, 2018, for $1.5 million. On March 1, 2022, he sells the warehouse. Determine Rueben's cost recovery for 2018–2022: (Use Table 6A-8) (Do not round intermediate computations. Round your final answers to 2 decimal places. Enter your answers in dollars and not in millions of dollars.) Rueben's Cost Recovery 2018 2019 2020 2021 2022 TABLE 6A-8 General Depreciation System Straight-Line Applicable Recovery Period: 39 Years Mid-Month Convention Month In the...
Required information [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship) has taxable income in 2019 of $240,000 before any depreciation deductions ($179, bonus, or MACRS) and placed some office furniture into service during the year. The furniture had been used previously by Liz Woolard (the owner of the business) before it was placed in service by the business. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round...
Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end) has 2019 taxable income of $650,000 for purposes of computing the $179 expense. The company acquired the following assets during 2019: (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,000 263,000 880,000 $ 3,413,000 b. What is the maximum total depreciation, including...
Janet purchased her personal residence in 2009 for $324,000. In January 2019, she converted it to rental property. The fair market value at the time of conversion was $270,000. (Use Table 6A-6) Required: a. Determine the amount of cost recovery that can be taken in 2019. b. Determine the amount of cost recovery that could be taken in 2019 if the fair market value of the property were $416,000. (For all requirements, round your answers to 2 decimal places.) Amount...
Assume that ACW Corporation has 2018 taxable income of $1,020,000 for purposes of computing the §179 expense. The company acquired the following assets during 2018 (assume no bonus depreciation): (Use MACRS Table 1, Table 2, and Table 5). Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2) Asset Placed in Service Basis Machinery Computer equipment Delivery truck Qualified improvement property Total 12-Sep 10-Feb 21-Aug 2-Apr $ 472,000 72,800 95,000 1,382,000 $2,021,000 a. What is the...
Required information The following information applies to the questions displayed below] Assume that Timberline Corporation has 2019 taxable income of $256,000 for purposes of computing the S179 expense. It acquired the following assets in 2019: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Purchase Asset Date Basis Furniture (7-year) Computer equipment (5- year) Copier (5-year) Machinery (7-year) December 1 $ 466,eee February 28 106, еее July 15 May 22 46,eee 496,eee $1,114,eee Total Required: a-1....
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