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Unformatted text preview: R 3-01 80. CPA-05549 Released 2007 Page 26 Rock Crab, Inc. purchases the following assets during the year: Computer Computer desk Office furniture Delivery van $3,000 1,000 4,000 25,000 What should be reported as the cost basis for MACRS five-year property? a. b. c. d. $3,000 $25,000 $28,000 $33,000 CPA-05549 Explanation Choice "c" is correct. MACRS 5-year property includes automobiles, light trucks, computers, typewriters, copiers, duplicating equipment, and other such items. The cost basis of the MACRS 5-year property is $28,000, calculated as follows: Computer Delivery van MACRS 5-year $ 3,000 25,000 $28,000 Choice "a" is incorrect. While the computer ($3,000) is included, the delivery van ($25,000) is also 5-year MACRS property. Choice "b" is incorrect. While the delivery van ($25,000) is included, the computer ($3,000) is also MACRS 5-year property. Choice "d" is incorrect. This answer option assumes that all of the assets in the question are MACRS 5year property. Ho...
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