Ch 8 HW Solutions

Ch 8 HW Solutions - (land)]. a. 2010: $1,200,000 .0197...

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Ch 8 HW Solutions 19. The basis of the asset is reduced by the § 179 limited expensing deduction (after applying the $800,000 limitation and before the taxable income limitation) before computing the MACRS cost recovery. pp. 8-13 and 8-14 31. Cost of asset $100,000 Less: Greater of allowed and allowable cost recovery: 2008 $ 455 2009 3,636 (4,091) Basis at the end of 2009 $ 95,909 Less: Cost recovery for 2010 ($100,000 × 3.636% × .5/12) (152) Basis on date of sale $ 95,757 Gain on sale of asset ($98,000 – $95,757) $ 2,243 p. 8-4 34. a. The mid-quarter convention must be used. The office machine is 7-year class property. 2010 MACRS cost recovery [$75,000 × .0357 (Table 8.2)] $2,678 b. 2011 MACRS cost recovery {$75,000 × [.2755 × (2.5/4)]} $12,914 pp. 8-5 to 8-8 40. The building’s depreciable basis is $1,200,000 [$1,400,000 (cost) – $200,000
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Unformatted text preview: (land)]. a. 2010: $1,200,000 .0197 (Table 8.6) = $23,640 b. 2016: $1,200,000 .03636 (Table 8.6) 10.5/12 = $38,178 p. 8-10 49. MACRS cost recovery: Cost $25,000 Statutory percentage (mid-quarter convention) 5% Cost recovery but subject to the limitation $ 1,250 Recovery limit (limited to $3,060*) $ 1,250 Less: Personal usage (20% $1,250) (250) Cost recovery $ 1,000 *These cost recovery limits are indexed annually. The 2010 amounts are used. pp. 8-15 to 8-17 and Table 8.2 53. 100% business use [$4,000 20% (Table 8.1)] 100% $800 45% business use [($4,000 10%) (Table 8.5)] 45% (180) Reduced cost recovery if personal use occurs $620 Tax cost ($620 28%) $174 pp. 8-15 to 8-18...
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This note was uploaded on 05/31/2011 for the course ACCT 421 taught by Professor May during the Spring '11 term at IPR.

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Ch 8 HW Solutions - (land)]. a. 2010: $1,200,000 .0197...

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