Q: Azona Corporation (a calendar-year taxpayer) purchased only one
Azona Corporation (a calendar-year taxpayer) purchased only one business asset during the year, 7-year used property that cost $2,600,000. Compute Azona’s depreciation for current year assuming that...
See AnswerQ: Kensington Corporation, Inc. (an October 31 fiscal year-
Kensington Corporation, Inc. (an October 31 fiscal year-end corporation) plans to purchase $2,700,000 of used office fixtures (7-year property), its only personalty acquired during the year. Kensingto...
See AnswerQ: Bernadette sold her home. She received cash of $40,
Bernadette sold her home. She received cash of $40,000, the buyer assumed her mortgage of $180,000, and she paid closing costs of $2,300 and a broker’s commission of $7,000. a. What is the amount rea...
See AnswerQ: Why do taxpayers have to recapture depreciation on depreciable assets sold at
Why do taxpayers have to recapture depreciation on depreciable assets sold at a gain? To which assets do the Section 1245 and 1250 recapture provisions apply?
See AnswerQ: DDF Corporation sold land it had used for parking and storage for
DDF Corporation sold land it had used for parking and storage for 20 years for $575,000. Its basis in the land was $68,000. It also sold some manufacturing equipment for $125,000 that it replaced with...
See AnswerQ: Craig Corporation (a calendar-year corporation) purchased $3
Craig Corporation (a calendar-year corporation) purchased $3,000,000 of used office furniture in April. It would like to know what is its reduction in depreciation expense for the first three years if...
See AnswerQ: The Grid Corporation owns a bank of boring machines. They regularly
The Grid Corporation owns a bank of boring machines. They regularly replace two machines each year. In the current year, the company sold Machine 8 for $12,000. It was purchased six years earlier for...
See AnswerQ: In July 2017, Lenux Corporation (a calendar-year taxpayer
In July 2017, Lenux Corporation (a calendar-year taxpayer) purchased $2,140,000 of new office furniture. Lenux claimed the maximum allowable Section 179 expensing and regular MACRS depreciation (but n...
See AnswerQ: Barbara had the following Section 1231 gains and losses in the previous
Barbara had the following Section 1231 gains and losses in the previous four years. a. How will Barbara treat a $25,000 gain in year 5? b. Is there any unrecaptured Section 1...
See AnswerQ: The Angel Corporation purchased an office building for $600,000
The Angel Corporation purchased an office building for $600,000 12 years ago. The corporation claimed $80,000 of cost recovery deductions before it sold the building for $700,000. a. Determine the am...
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