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In 2015, Taxpayer sold machinery used in its business for its fair value of $100,000 to an unrelated party who agreed to pay $25,000 in
- In 2015, Taxpayer sold machinery used in its business for its fair value of $100,000 to an unrelated party who agreed to pay $25,000 in 2020 plus $25,000 per year (plus adequate interest) in June of the next three years. The machinery had an initial basis of $70,000 and accumulated depreciation of $36,400 through the date of sale. What is the total gain Taxpayer must recognize in 2020 under the installment method.
- Business taxpayer decided to acquire the assets of a competing enterprise. On 15 August 2020, Taxpayer acquired the competing business for $175,000 and allocated $30,000 of the purchase price to goodwill. Determine the amount of amortization expense Taxpayer may deduct with regard to the purchased goodwill in 2020.
- In 2015, its initial year, Business Taxpayer incurred $53,750 in start-up costs. Determine the amount of start-up costs Taxpayer can immediately expense (not including amortization) in 2020.
- Mario operates a business and uses the accrual method of accounting. During 2020, Mario hires his brother, Luigi, who is a cash method taxpayer, to provide accounting services to Mario's business, and Luigi completes all his work before year end. In December of 2020, Luigi bills Mario $2,500 for the accounting services but receives only $2,000 in payments from Mario. Determine the amount Mario may deduct in 2020 with regard to the accounting services provided by Luigi.
- Taxpayer operates a trucking business using the accrual method and reports on a calendar year. This year, Taxpayer signed a $50,000 binding contract with complete Auto Repair. Under the contract, complete Auto Repair will provide Taxpayer with up to 2,000 hours of vehicle repairs at $30 per hour. This year, complete Auto Repair provided 200 hours of repair services and billed Taxpayer $6,000 for those services. At year-end, Taxpayer had not paid complete Auto Repair for the services. Determine the amount Taxpayer may deduct for the repair services this year. If none, enter 0.
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