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 | $28,250 | $10,955 | 7-year | Half-year |
Equipment | 5/2/18 | 91,500 | 65,148 | 5-year | Half-year |
Machinery | 9/30/18 | 74,750 | 53,222 | 5-year | Half-year |
On July 8, Hiram sold its equipment. On August 18, it purchased and placed in service new tools costing $607,000; 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 $1,180,000. Use Table 7-2. (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar amount.
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