Week 4 solutions[1]

Week 4 solutions[1] - Week4 Chapter8 32.

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Week 4  Chapter 8 32. José’s basis for cost recovery is $200,000 because the fair market value of the house at  the date of the conversion from personal use to rental property ($200,000) is less than  the $300,000 adjusted basis. The cost recovery is $5,758 [$200,000 × 2.879% (Table  8.6)].   p. 8-5 35. a. 2010 MACRS cost recovery ($100,000 × 20%) (Table 8.1)  $20,000 b. 2011 MACRS cost recovery [$100,000 × 32% (Table 8.1) × 1/2]  $16,000 pp. 8-5 to 8-9 39. 2010: $1,800,000 × .01605 (Table 8.6)  = $28,890 2020: $1,800,000 × .02564 (Table 8.6)  = $46,152 p. 8-10  40. The building’s depreciable basis is $1,200,000 [$1,400,000 (cost) – $200,000 (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  42. Under these circumstances, the straight-line method must be used. MACRS cost recovery ($70,000 × .05) (Table 8.5)
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Week 4 solutions[1] - Week4 Chapter8 32.

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