Determine from tax perspective-what is bonus depreciation

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Reference no: EM133146815

1. Provide a concise but comprehensive overview of the concept of cost recovery.

2. Determine from a tax perspective, if the costs above are deductible expenses or capitalized costs. Define what constitutes an acquisition to be capitalization. Explain.

3. Compute the corporation's MACRS deprecation with respect to the assets placed in service this year. Assume that the Company does not elect to use Section 179 or bonus depreciation. Use the provided Excel templateand detaileach acquisition with the required information. Refer to Revenue Procedure 87-56 for information on asset class information.

4. The corporation decided to purchase $300,000 of additional specialty candy-making equipment in December. The corporation could buy the equipment in December or postpone until January of the new year. What effect would this decision have on the depreciation calculation with regard to the assets already placed in service. Be specific.

5. What is Sec 179 Expensing election? How much and what assets are eligible? Are any of the asset not eligible? If so, explain. Does the company face either, or both of the two limitations? Be specific in your explanation.

6. What is bonus depreciation? How much and what assets are eligible? Are any of the asset not eligible? If so, explain. Does the company face any limitations? Be specific in your explanation.

7. Assume that the corporation will maximize its cost recovery deductions. Using the Excel template, calculate the amount of MACRS depreciation, Section 179 and bonus depreciation.

8. Explain the order of application and the overall strategy an organization would use to determine the method and amounts used for each.

9. Use appropriate format, technical language, the written analysis should reflect your own word with appropriate references. However, only cite primary sources (law) in the body of the memo. Your written analysis should be consistent with the Excel calculated amounts.

10. Write a reflection paragraph discussing what you learned from completing the assignment. Be specific. Also, what could be done to improve the assignment. Your reflection should be incorporated at the end of your written document after your conclusion.

Attachment:- Federal Taxation-Tax Research.rar

Reference no: EM133146815

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