Question
At the beginning of its 2021 tax year, Hiram owned the following business assets: Date Placed in Service Initial Cost Accumulated Depreciation Recovery Period Depreciation
At the beginning of its 2021 tax year, Hiram owned the following business assets:
Date Placed in Service | Initial Cost | Accumulated Depreciation | Recovery Period | Depreciation Convention | |
Furniture | 6/19/19 | $36,250 | $14,058 | 7-year | Half year |
Equipment | 5/2/18 | $61,000 | $43,432 | 5-year | Half year |
Machinery | 9/30/18 | $58,500 | $41,652 | 5-year | Half year |
On July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $593,000; these tools are three-year recovery property. These were Hirams only capital transactions for the year.
Required:
Compute Hirams maximum cost recovery deduction for 2021. In making your computation, assume that taxable income before depreciation exceeds $1,040,000. Use Table 7-2. (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar amount.)
2021 Depreciation | |
Furniture | |
Equipment | |
Machinery | |
Total MACRS Depreciation | |
Section 179/bonus on new tools | |
Maximum 2021 cost recovery deduction |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started