Compute the depreciation deduction

Assignment Help Accounting Basics

Reference no: EM13141268

Introduction:

On June 26, 2004, Elaine purchased and placed into service a new computer system costing $8,000. The computer system was used 80 percent for business and 20 percent for personal use in both 2004 and 2005. Elaine claimed only regular MACRS depreciation. In 2006, the computer system was used 45 percent for business and 55 percent for personal use.

Task:

Compute the depreciation deduction for the computer system in 2006 and the cost recovery recapture.

Assume that in 2004, Elaine had instead expensed under Section 179 the cost of the computer system. Compute the cost recovery recapture in 2006.

Reference no: EM13141268

Questions Cloud

Relation to the hypothesis : When evaluating the usefulness of a research study in relation to the hypothesis it is important to make sure:

Ultimate downfall : Describe Winston%u2019s character in 1984 by George Orwell as it relates to his attitude toward the Party. In what ways might his fatalistic streak contribute to his ultimate downfall? 5 pages

Amount of sales to receive bonus : The president of Jackson Corporation will not receive a bonus next year unless the company's profits are at least $435,000. Jackson sells a single product at a price of $27 per unit. If variable costs are $12 per unit and fixed costs total $150,00..

Find out the amount due on the note : MixRecording Studios purchased $7,800 in electronic components from TechCom. MixRecording Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note?

Compute the depreciation deduction : Compute the depreciation deduction for the computer system in 2006 and the cost recovery recapture. Assume that in 2004, Elaine had instead expensed under Section 179 the cost of the computer system. Compute the cost recovery recapture in 2006.

Problem related to mortgage on the land : Albert transfers land (basis of $140,000 and fair market value of $320,000) to Gold Corporation for 80% of its stock and a note payable in the amount of $80,000. Gold assumes Albert's mortgage on the land of $200,000.

Expected expenses of a child while studying : You Would like to make 43 equal payments over the next 21 years (The first payment to be made immediately all other payment to be made at 6 month internals, with the final payment to be made at he 21st. birthday. So that you will be able to cover ..

Total amount paid for the merchandise : A company purchased $4,000 worth of merchandise. Transportation costs were an additional $400. The company later returned $445 worth of merchandise and paid the invoice within the 3% cash discount period. The total amount paid for this merchandise..

Pervasive factors-misstate assertions in expenditure cycle : Identify several pervasive factors that might motivate management to misstate assertions in the expenditure cycle.

User Account

All Pages