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Income tax problem question: Andrew, a cash method tax payer, starts his company (an LLC) in 2020. Since his company is new, he has to
Income tax problem question:
Andrew, a cash method tax payer, starts his company (an LLC) in 2020. Since his company is new, he has to purchase a many item for the business. Below are the list of items Andrew purchased in 2020: Note Date Purchase 1/03/2020 2/5/2020 6/7/2020 11/29/2020 Item Office furniture Computers Equipment Car Cost $20,000 $10,000 $100,000 $25,000 To use as the delivery vehicle a) What is Andrew total depreciation expenses in 2020? (Provide detailed calculations/explanations for possible partial credit) b) Assuming that Andrew cannot take any $179 deduction and Bonus depreciation, what is Andrew total depreciation expenses in 2020 for the items above? (Provide detailed calculations/explanations for possible partial credit) c) Andrew wrote you an email yesterday saying that he forgot to mention a few other expenditures in 2020. Those items are below: Legal cost + fees to establish the LLC: $5,000, paid in 1/1/2020 Warehouse rent: $18,000, paid in 06/31/2020 (the day that Andrew signed the rental contract). Andrew must pay the rent for 18 months ahead of time according to the contract Ignore the other deduction in part a or b, how much deduction can Andrew claim for these new items in 2020? (Provide detailed calculations/explanations for possible partial credit)
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