What is the depreciation expense

Reference no: EM13818738

Western Bank & Trust purchased land and a building for the lump sum of $3 million dollars.

To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the land. A more realistic allocation would have been 70% to the building and 30% to the land.

The average useful life for commercial buildings is 25 years.

What is the depreciation expense for the 90%/10% allocation?

What is the depreciation expense for the 70%/30% allocation?

Why would Western view this action as a tax advantage?

Reference no: EM13818738

Questions Cloud

Discuss your choice of two reasons excuses : Discuss your choice of two reasons (excuses?) mentioned within "Not Doing It By the Book" that we neglect to read -- or downright ignore -- manuals, instructions, quick guides, etc.

When you add a calculated field to a query it creates a new : When you add a calculated field to a query it creates a new

How writing for the workplace differ from writing in college : How might writing for the workplace differ from writing in college? Describe some of the important ways that writing functions in the workplace or other professional contexts.

Operating system for an existing machine : A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted ..

What is the depreciation expense : The average useful life for commercial buildings is 25 years. What is the depreciation expense for the 90%/10% allocation?

How job analysis could be used at customers first : Determine how job analysis and job evaluation could be used at Customers First to develop an internally consistent compensation system.

When you create a query in access than you are essentially : When you create a query in access, you are essentially

Describe the most critical business processes : Describe how technology is changing the face of businesses today. Describe the most critical business processes that utilize information systems in your selected company.

Determining the uniform commercial code : Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why.

User Account

All Pages