ACCT 3350-Fundamentals of Taxation-Federal Taxation

(3) Just today Ms. Client paid exactly $2.75 million for a brand new, high-speed widget making machine, an item of 5-year MACRS property. As her CPA, you prepare a depreciation schedule for her, not featuring any bonus depreciation" or 8 179 election or anything other than the usually applicable convention. What dollar amount does your schedule show as Ms. Client's MACRS deprecia- tion deduction with respect to this machine for the year 2022? (4) The cost of a covenant not to compete (a/k/a a "noncompete agreement") sometimes is properly amortized over its stated term (its legal life, typically not more than 3-5 years) but sometimes instead must be amortized over 15 years (180 months) regardless of its term. Briefly explain exactly when i.e., under what circumstances) and why this difference. A quick example of each situation would help. (5) Your textbook cites a partnership interest as one example of an intangible asset that is not amortizable for FIT purposes. Briefly explain what the proper treatment of your tax basis in a partnership interest is instead.*** *** As I recall, we've gone over this in class more than once already... (3) Just today Ms. Client paid exactly $2.75 million for a brand new, high-speed widget making machine, an item of 5-year MACRS property. As her CPA, you prepare a depreciation schedule for her, not featuring any bonus depreciation" or 8 179 election or anything other than the usually applicable convention. What dollar amount does your schedule show as Ms. Client's MACRS deprecia- tion deduction with respect to this machine for the year 2022? (4) The cost of a covenant not to compete (a/k/a a "noncompete agreement") sometimes is properly amortized over its stated term (its legal life, typically not more than 3-5 years) but sometimes instead must be amortized over 15 years (180 months) regardless of its term. Briefly explain exactly when i.e., under what circumstances) and why this difference. A quick example of each situation would help. (5) Your textbook cites a partnership interest as one example of an intangible asset that is not amortizable for FIT purposes. Briefly explain what the proper treatment of your tax basis in a partnership interest is instead.*** *** As I recall, we've gone over this in class more than once already