Reference no: EM132999532

Questions-

Q1. In 2017, Olga Co. purchased a piece of business-use equipment for $100,000. 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, 2017. This was the only asset that Olga Co. placed in service in 2017. Olga Co. did not elect Section 179 deduction and elected out of Section 168(k) bonus depreciation. What is Olga Co.'s depreciation deduction for 2017 (the year the asset was placed in service)?

Q2. Same facts as previous question. Olga Co. sold the equipment on February 1, 2020. What is Olga Co.'s depreciation deduction for 2020?

Q3. 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?

Q4. 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)?

Q5. 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?

Q6. 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?

Q7. Same facts as previous question. What will Oscar's depreciation deduction be for 2021?

Q8. Frank Investor purchased an office building (including land) for $2,000,000 and placed it in service on June 27, 2020. The land is valued at $1,200,000, and the building is valued at $800,000. Frank depreciated the property under MACRS GDS. What is Frank's depreciation deduction for 2020?

Q9. 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. What is Farrah's tax depreciation deduction for 2018?

Q10. 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?

Q11. Miller Corp. had book income (net) of $1,000,000 in 2020. The corporation's federal income tax expense was $210,000. The corporation incurred $26,000 in meal expenses in 2020 (the $26,000 is 100% of meal expenses). The corporation is entitled to a dividends received deduction of $8,000 in 2020. What is the corporation's taxable income for 2020?

Q12. Bud Corp. had book income (net) of $1,000,000 this year. The corporation's federal income tax expense was $200,000. This year, the corporation purchased and placed in service a depreciable asset. The asset cost $60,000. For book purposes, depreciation this year was $20,000 (already included in the calculation of $1,000,000 book income). For tax purposes, the corporation elected bonus depreciation for the asset. What is the corporation's taxable income for this year?