Questions from Federal Taxation

Q: In July 2017, Surecut Sawmills buys office furniture for $570

In July 2017, Surecut Sawmills buys office furniture for $570,000. Assume that Surecut elects not to claim bonus depreciation. a. Compare cost-recovery deductions using maximum, minimum, and intermed...

Q: Determine whether Frank or Dorothy, Frank’s friend, is taxed on

Determine whether Frank or Dorothy, Frank’s friend, is taxed on the income of each of the following situations: a. Frank owns 8% bonds with a $10,000 face value. The bonds pay interest annually on Ju...

Q: Stan purchases machinery costing $100,000 for use in his

Stan purchases machinery costing $100,000 for use in his business in 2017. The machinery is 7-year MACRS property and has an ADS life of 12 years. Complete a depreciation schedule using the regular...

Q: Guadalupe purchases an office building to use in her business at a

Guadalupe purchases an office building to use in her business at a cost of $520,000. She properly allocates $20,000 of the cost to the land and $500,000 to the building. Assuming that Guadalupe woul...

Q: Refer to problem 52. Guadalupe sells the building on October 26

Refer to problem 52. Guadalupe sells the building on October 26, 2017. What is her 2017 depreciation deduction if she purchased the building on a. June 30, 1992? b. June 30, 1994? Data from Proble...

Q: Anton purchases a building on May 4, 2000, at a

Anton purchases a building on May 4, 2000, at a cost of $270,000. The land is properly allocated $30,000 of the cost. Anton sells the building on October 18, 2017, for $270,000. What is his gain or...

Q: On March 1, 2017, Babar Inc., pays $1

On March 1, 2017, Babar Inc., pays $1,200,000 for a store building, moves into the building and begins business on April 1. Babar properly allocates $1,000,000 of its cost to the building and $200,00...

Q: On June 1, 2016, Kirsten buys an automobile for $

On June 1, 2016, Kirsten buys an automobile for $60,000. Her mileage log for the year reveals the following: 20,000 miles for business purposes; 7,000 miles for personal reasons; and 3,000 miles comm...

Q: On May 15, 2016, Lurlene buys a used automobile for

On May 15, 2016, Lurlene buys a used automobile for $17,000. She drives it, 9,000 miles for business and 3,000 miles for personal trips during the year. What is Lurlene’s maximum cost recovery for 2...

Q: On July 4 of the current year, Lawrence invests $240

On July 4 of the current year, Lawrence invests $240,000 in a mineral property. He estimates that he will recover 800,000 units of the mineral from the deposit. During the current year, Lawrence rec...