Questions from Individual Taxation

Q: Lina purchased a new car for use in her business during 2016

Lina purchased a new car for use in her business during 2016. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum deprec...

Q: Burbank Corporation (calendar-year end) acquired the following property

Burbank Corporation (calendar-year end) acquired the following property this year: a. Assuming no bonus or §179 expense, what is Burbank’s maximum cost recovery for this...

Q: Paul Vote purchased the following assets this year (ignore §179

Paul Vote purchased the following assets this year (ignore §179 expensing and bonus depreciation when answering the questions below): a. What is Paul’s allowable MACRS de...

Q: After several profitable years running her business, Ingrid decided to acquire

After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $300,000. Ingrid...

Q: Juliette formed a new business to sell sporting goods this year.

Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not incl...

Q: Nicole organized a new corporation. The corporation began business on April

Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: a. What is the total amoun...

Q: Bethany incurred $20,000 in research and experimental costs for

Bethany incurred $20,000 in research and experimental costs for developing a specialized product during July of year 1. Bethany went through a lot of trouble and spent $10,000 in legal fees to receive...

Q: Last Chance Mine (LC) purchased a coal deposit for $

Last Chance Mine (LC) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LC mined the coal and sold it, reporting gross receipts of $1 million,...

Q: Jose purchased a delivery van for his business through an online auction

Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping cost...

Q: Emily purchased a building to store inventory for her business. The

Emily purchased a building to store inventory for her business. The purchase price was $760,000. Beyond this, Emily incurred the following necessary expenses to get the building ready for use: $2,000...