AC507 Unit 4 Assignment
5. Delta Corporation purchased three assets during 2013: a new automobile costing $60,000, used office furniture costing $600,000, and a warehouse costing $850,000 (of which $100,000 is for the land). Which asset(s) should Delta Corporation have elected Section 179 expensing for to have maximized its depreciation expense and why?
17. Last year, Anne purchased a condo unit for $125,000. She used the condo as her personal residence. In the current year, when the condo unit appraises at $132,000, Anne moves out and converts the condo to rental property. What basis can Anne use when computing her depreciation on the rental condo unit?
22. Azona Corporation (a calendar-year taxpayer) purchased only one business asset during 2014, 7-year property that cost $2,600,000. Compute Azona’s depreciation for 2014 assuming that
58. Go to the IRS Web site at www.irs.gov and locate Publication 946: How to Depreciate Property. Locate the depreciation tables at the end of the publication and calculate the regular first-year depreciation for the following assets, all placed in service in the third month of the year:
19. Corgill Corporation sold land that it had used for storing old equipment. Corgill owned the land for seven years and it had a basis of $234,000. Corgill received $50,000 cash and a note for $100,000 and the purchaser assumed Corgill’s $150,000 mortgage on the property. Corgill also paid a realtor’s fee of $15,000 and other selling expenses of $2,000.
23. The Grid Corporation owns a bank of boring machines. They regularly replace two machines each year. In the current year, the company sold Machine 8 for $12,000. It was purchased six years earlier for $40,000, and its adjusted basis was $14,000. Machine 6 was sold for $24,000. It was purchased four years ago for $45,000 and had an adjusted basis of $19,000.
62. A subsidiary of Corporation A, an electrical utility located in Springfield, and a subsidiary of Corporation B, a diversified manufacturer also located in Springfield, formed a joint venture under the general partnership laws of their state.