Homework Set 3 Solution - Tax 4001 2011/2012 Homework Set#3...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Tax 4001 2011/2012 Homework Set #3 Solution PAGE 1 #1 Cost 40,000 Statutory % 20% MACRS Calculated 8,000 Times Business-Use % 80% MACRS ALLOWED 6,400 2011 YEAR ONE AUTO LIMIT 3,060 Times Business-Use % 80% PASSENGER AUTO LIMIT $2,448 2009 cost recovery limited to $2,448. #2 a. 400,000 20% 2010 Cost Recovery 80,000 b. 400,000 MACRS Cost Recovery 32% 1/2 year because sold 50% 2011 Cost Recovery 64,000 #3 Lesser of QPAI or TI 3,100,000 Times DPAD Percentage 9% DPAD 279,000 Limited to: 50% of Qualifying W-2 wages 215,000 Therefore Tony Inc can only take a DPAD of $215,000. #4 Total Cost 1,800,000 Less: Land (350,000) Apt Bldg cost 1,450,000 a. 2011 1,450,000 depreciation percentage 1.970% allowed cost recovery 28,565 b. 2016 1,450,000 depreciation percentage 3.636% mid-month convention 0.88 10.5/12 months allowed cost recovery 46,132 c. Purchase Price 1,800,000 less 2011 deprec (28,565) less 2012 - 2015 deprec (210,888) 1,450,000 * .03636 * 4 years less 2016 deprec (46,132) Adjusted Basis 1,514,415 d. Sale Price 2,300,000 Less: Adjusted Basis (1,514,415) Gain on Sale $785,585
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Tax 4001 2011/2012 Homework Set #3 Solution PAGE 2 #5 a. 2011 1,450,000 depreciation percentage 1.391% allowed cost recovery 20,170 b. 2016 1,450,000 depreciation percentage 2.564% mid-month convention 0.88 10.5/12 months allowed cost recovery 32,531 c. Purchase Price 1,800,000
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern