Reference no: EM131268061
Doris acquired a machine at a cost of $30,000 for use in her business, and she placed it in service on April 1, 2014. The machine is depreciated under MACRS, with a 7-year recovery period. This machine was the only asset Doris purchased this year. Doris elects to expense $25,000 of the acquisition cost under IRC Sec. 179. a) What is Doris’s total depreciation deduction for the machine in 2014? b) Doris then sells the machine on October 5, 2016 for $8,000. Calculate Doris’s depreciation deductions for 2014 through 2016, the adjusted basis of the machine on October 5, 2016, and the gain or loss on the sale.
|
Self-supporting and dependent of his parents
: In 2015, David, a single 18-year old taxpayer, received a salary of $3,600 and interest income of $1,800. He had $600 in itemized deductions. Calculate David’s taxable income assuming he is (a) self-supporting and (b) a dependent of his parents
|
|
Adjusted gross income and taxable income
: What is the 2016 adjusted gross income and taxable income for Bill and Lola, a married couple, with two dependent children, based on the following information?
|
|
Gain from dispositions of certain depreciable property
: A taxpayer sold for $250,000 equipment that had an adjusted basis of $220,000. Through the date of the sale, the taxpayer had deducted $40,000 of depreciation. Of this amount, $27,000 was in excess of straight-line depreciation. What amount of gain w..
|
|
Each asset is transferred subject to the liability
: Walter swaps his warehouse for Sally’s office building, and the exchange qualifies as a like-kind exchange. Walter’s adjusted basis for the warehouse is $500,000 and the warehouse is subject to a liability of $150,000. The FMV of Sally’s office build..
|
|
Depreciation deductions-gain or loss on the sale
: Doris acquired a machine at a cost of $30,000 for use in her business, and she placed it in service on April 1, 2014. The machine is depreciated under MACRS, with a 7-year recovery period. This machine was the only asset Doris purchased this year. Ca..
|
|
Long term capital gain or long term capital loss on sale
: Wanda owns a non-depreciable capital asset she has held for investment. She purchased the asset for $200,000 six years ago, and it is now subject to a $54,000 liability. Calculate the amount of Wanda’s Long Term Capital Gain or her Long Term Capital ..
|
|
Using the percentage-of-completion method
: In spring 2015, Parmac Engineering Company signed a $1,000,000 contract with the city of Parkersburg, to construct a new city hall. Parmac expects to construct the building within two years and incur expenses of $600,000. Using the percentage-of-comp..
|
|
What must be done before jack can claim the exemption
: Jane, age 65, who lives with her unmarried son, Jack, received $7,000, which was used for her support during the year. Her sources of support were as follows: Social Security Benefits $1,500 Jack 2,600 Carol, an unrelated friend 800 Dwayne, Jane’s so..
|
|
Straight-line method of amortization for bond premium
: Flounder Company issued $612,000 of 9%, 20-year bonds on January 1, 2017, at 101. Interest is payable semiannually on July 1 and January 1. Flounder Company uses the straight-line method of amortization for bond premium or discount. Prepare the journ..
|