In the current year B purchased new office equipment costing $40,000 and received a trade allowance of $3,000 for her old equipment. The old equipment was acquired 6 years ago for $19,000. B's Class 8 UCC balance the beginning of the current year was $12,000. What is the maximum CCA deduction for Class 8 that B can claim in the current year? Note: Assume the new equipment is not designated immediate expensing property. Do not place a minus sign in front of the amount 6,000

In the current year B purchased new office equipment costing $40,000 and received a trade allowance of $3,000 for her old equipment. The old equipment was acquired 6 years ago for $19,000. B's Class 8 UCC balance the beginning of the current year was $12,000. What is the maximum CCA deduction for Class 8 that B can claim in the current year? Note: Assume the new equipment is not designated immediate expensing property. Do not place a minus sign in front of the amount 6,000

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 4MCQ: James purchased office equipment for his business. The equipment has a depreciable basis of $7,000...

See similar textbooks

Similar questions

Which of the following statements with respect to the depreciation of property under MACRS is incorrect? Under the half-year convention, one-half year of depreciation is allowed in the year the property is placed in service. If a taxpayer elects to use the straight-line method of depreciation for property in the 5 -year class, all other 5 -year class property acquired during the year must also be depreciated using the straight-line method. In some cases, when a taxpayer places a significant amount of property in service during the last quarter of the year, real property must be depreciated using a mid-quarter convention. Real property acquired after 1986 must be depreciated using the straight-line method. The cost of property to which the MACRS rate is applied is not reduced for estimated salvage value.
James purchased office equipment for his business. The equipment has a depreciable basis of $7,000 and was put in service on June 1,2019. James decides to elect straightline depreciation under MACRS for the asset over the minimum number of years (7 years), and does not use bonus depreciation or make the election to expense. What is the amount of his depreciation deduction for the equipment for the 2019 tax year? $2,000 $1,000 $500 $0 None of the above
McKenzie purchased qualifying equipment for his business that cost $212,000 in 2021. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. Calculate McKenzie's § 179 expense deduction for 2021 and any carryover to 2022. § 179 expense deduction for 2021: $ § 179 carryover to 2022: $ b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.3. § 179 expense deduction for 2021: $ § 179 carryover to 2022:
On June 25, 2020, Ms. Annie Rawlings purchased an automobile to be used exclusively in her unincorporated business. The cost of the automobile was $51000, before GST and PST. She finances a part of the purchase price and, as a consequence, has financing charges for the period June 25, 2020 to December 31, 2020 of $4280. Ms. Rawlings has decided not to deduct any CCA this year. Ignoring any deduction for CČA, how much other costs can Ms. Rawlings deduct in 2020 with respect to this vehicle acquisition? Round to the nearest dollar. Do NOT w commas, dollar signs, or decimals in your response.
On June 28, 2020, Ms. Annie Rawlings purchased an automobile to be used exclusively in her unincorporated business. The cost of the automobile was $49000, before GST and PST. She finances a part of the purchase price and, as a consequence, has financing charges for the period June 28, 2020 to December 31, 2020 of $3920. Ms. Rawlings has decided not to deduct any CCA this year. Ignoring any deduction for CCA, how much other costs can Ms. Rawlings deduct in 2020 with respect to this vehicle acquisition?
Melissa, an individual, owns a business and has the following assets in service at the end of 2021. She has never sold a $1231 asset. Melissa would like to take the 5179 deduction this year if allowed, but would like to opt out of bonus depreciation. She has not taken either in previous years. She has no taxable income limitations. Asset Recovery Cost Date placed in service period Previously purchased assets: Furniture 32,000 February 2019 Land 200,000 August 2019 Industrial machine 286,000 October 2019 Apartment building 3,000,000 October 2019 Assets purchased this year: Delivery truck 310,500 January 2021 Machinery 2,470,000 7 August 2021 What is the total cost recovery for 2021?
In May 2021, Cassie acquired a machine for $30,000 to use in her business. The machine is classified as 5-year property. Cassie does not expense the property under Sec. 179 or bonus depreciation. Cassie's depreciation on the machine for 2021 is A) $3,000. B) $6,000. C) $12,000. D) $15,000.
In Year 1, T, a calendar year taxpayer, decided to move her insurance business into another office building. She purchased a used building for $700,000 (excluding the land) on March 15. T also purchased new office furniture for the building. The furniture was acquired for $200,000 on May 1. Compute MACRS depreciation. Ignore first-year expensing and bonus depreciation. MACRS depreciation tables are located in the Appendix. Assuming that the furniture was purchased on October 20, please enter T's depreciation deduction for Building for the first year using the Formula method (rounded to the nearest cent)
The Nelson Company has a taxation year end of December 31. On January 1 of the current year, the UCC of Class 8 was $80,000. The Nelson Company has a policy of always deducting maximum CCA. Each of the following questions deals with transactions during the current year which involved Class 8 property. Choose the best answer for each question. An additional class 8 property was purchased for $20,000 on April 1, 2023. Maximum CCA for Class 8 is: A) $20,000 B) $60, 800 C) $22,000 D) $13,000
gemini auto repair is a calendar year taxpayer. In 2019, the repair shop purchased a light weight truck for $44,000 that it used to drive customers back and forth to their cars while the shop worked on their cars (i.e. for business purchases). in 2020, the repair shop sold the truck dor $33,000. assume that the lightweight truck was the only asset Gemini purchased in 2019. Gemini auto repair opted out of Sec. 179 and bonus depreciation for 2019. do not use any macrs tables to calculate regular depreciation, instead just assume that the depreciation deductions gemini actually took for the truck for 2019 and 2020 were $6,000 and $7,000, respectively. what was the total amount of gain(or loas) for Gemini in 2020 on the sale of the truck? 1. $11,000 loss 2. $5,000 loss 3. $4,000 loss 4. $33,000 gain 5. $2,000 gain
McKenzie placed in service qualifying equipment (7-year MACRS class) for his business that cost $212,000 in 2023. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. If an amount is zero, enter "0". a. Calculate McKenzie's § 179 expense deduction for 2023 and any carryover to 2024. § 179 expense deduction for 2023: $ 5,600 ✓ § 179 carryover to 2024: $ 206,400 b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.3. Additional first-year depreciation for 2023: ox MACRS cost recovery for 2023: Total cost recovery for 2023: $ 0 X 0 X
For his business, McKenzie purchased qualifying equipment that cost $212,000 in 2019. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment? McKenzie's § 179 expense deduction is ___________ for 2019?