Clay LLC placed in service machinery and equipment (seven year property) with a basis of $3.464.500 on June 6, 2020. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including 5179 expensing (ignoring any possible bonus depreciation). (Use MACRSTable 1) (Round final answer to the nearest whole number.)

Clay LLC placed in service machinery and equipment (seven year property) with a basis of $3.464.500 on June 6, 2020. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including 5179 expensing (ignoring any possible bonus depreciation). (Use MACRSTable 1) (Round final answer to the nearest whole number.)

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 6CE

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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.
Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,370,000 on June 6, 2022. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus depreciation). (Use MACRS Table 1.) Note: Round final answer to the nearest whole number. Multiple Choice $1,080,000 $481,573 $422,984 $832,984 None of the choices are correct.
Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,468,000 on June 6, 2021. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus 25 depreciation). (Use MACRS Table 1.) (Round final answer to the nearest whole number.) Multiple Choice $1,050,000 $498,149 $466,711 $668,711 None of the choices are correct.
Crouch LLC placed in service on May 19, 2021, machinery and equipment (seven-year property) with a basis of $3,200,000. Assume that Crouch has 16 sufficient income to avoid any limitations. Calculate the maximum depreciation deduction including §179 expensing (but ignoring bonus depreciation). (Use MACRS Table 1.) Multiple Choice $457,280 $470,000 $860,117 $1,050,000
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Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,464,500 on June 6, 2020. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus depreciation). (Use MACRS Table 1.) (Round final answer to the nearest whole number.)
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