Reference no: EM133000631
Questions -
Q1) E Co. purchased and placed in service the following assets in 2020:
1. Computer (5-year property) purchased for $3,000,000 and placed in service on June 30, 2020;
2. Tractor unit for use over road (3-year property) purchased for $2,000,000 and placed in service on September 30, 2020;
3. Equipment (7-year property) purchased for $5,000,000 and placed in service on October 1, 2020.
All assets are depreciated under MACRS GDS (no SL election). E Co. is not eligible for 179 expense (phased out), and E Co. elected out of bonus depreciation.
What is E Co.'s total depreciation deduction for 2020?
Q2) In 2017, Oliver Co. purchased a business-use asset for $100,000. The asset has a 5-year MACRS GDS recovery period and is depreciated under MACRS GDS (no SL election). The asset was placed in service on October 10, 2017. This was the only asset that Oliver Co. placed in service in 2017. Oliver Co. did not elect Section 179 deduction and elected out of Section 168(k) bonus depreciation.
Oliver Co. sold the asset on February 1, 2020.
What is Oliver Co. depreciation deduction for 2020 (year 4)?
Q3) In 2020, Oscar Co. purchased a piece of business-use equipment for $1,000,000. The equipment has a 7-year MACRS GDS recovery period and is depreciated under MACRS GDS (no SL election). The equipment was placed in service on September 10, 2020. This was the only asset that Oscar Co. placed in service in 2020. Oscar Co. did not elect Section 179 deduction. Oscar Co. did not elect out of Section 168(k) bonus depreciation.
What is Oscar Co.'s total depreciation deduction for 2020? AND What will Oscar's depreciation deduction be for 2021?
Q4) Farrah Investor purchased an apartment building (including land) for $2,000,000 and placed it in service on December 27, 2018. The land is valued at $1,000,000, and the building is valued at $1,000,000. Farrah depreciated the property under MACRS GDS. On February 28, 2020, Farrah sold the apartment building. What is Farrah's depreciation deduction for 2020?