Questions from Federal Taxation

Q: Kris starts a new business in 2017. She purchases 7-

Kris starts a new business in 2017. She purchases 7-year MACRS property costing $12,000. Her business income before any cost-recovery deductions is $8,000. Kris does not want to claim bonus depreci...

Q: Peter Corporation purchases the following assets during the current year. Identify

Peter Corporation purchases the following assets during the current year. Identify which assets are not subject to cost recovery using depreciation, and state why that is so. a. Land b. Copyright c....

Q: State whether each of the following expenditures incurred during the current year

State whether each of the following expenditures incurred during the current year should be treated as a repair expense or capitalized and depreciated using MACRS: a. Replacement of the carpeting in a...

Q: In each of the following cases, determine who is taxed on

In each of the following cases, determine who is taxed on the income: a. Camille owns several rental properties that produce $3,000 in income each month. Because of the age of the properties, Camille...

Q: Explain how the business purpose concept provides the basis for determining which

Explain how the business purpose concept provides the basis for determining which expenses are deductible.

Q: For each of the following expenditures incurred during the current year,

For each of the following expenditures incurred during the current year, indicate whether it should be treated as a repair expense or capitalized and depreciated using MACRS: a. Replacement of the roo...

Q: A taxpayer purchases $507,000-worth of property that

A taxpayer purchases $507,000-worth of property that qualifies for the Section 179 deduction during the current year. The taxpayer would like to deduct the greatest depreciation expense possible (inc...

Q: Firefly, Inc., acquires business equipment in July 2017 for $

Firefly, Inc., acquires business equipment in July 2017 for $2,045,000. Assume that Firefly elects not to claim bonus depreciation. a. What is Firefly's maximum Section 179 deduction for 2017? Expla...

Q: Joan is interested in buying a special diagnostic machine for use in

Joan is interested in buying a special diagnostic machine for use in her medical practice. The machine will cost her $16,000 and will have a $2,000 salvage value at the end of its 8-year life. Joan...

Q: You are the resident tax expert for Wetzel’s Pretzels, an international

You are the resident tax expert for Wetzel’s Pretzels, an international producer of junk food. The controller has come to you with the company's capital expenditures budget for next year. The budget s...