Intangible Assets (LO. 10) On April 18, 2020, Petros buys all the assets of Brigid's Muffler Shop. Included in the purchase price of $296,000 is a payment of $19,100 to Brigid not to open a competing shop in the state for a period of 5 years. Brigid's assets at the date of sale are as follows: Asset Adjusted basis Inventory $8,900 Fair Market Value $11,600 31,400 Equipment 3,200 Building 79,500 113,500 Patent 800 13,000 Land 4,900 9,000 The patent is on a special muffler that Brigid developed and patented 5 years ago, Petros would like to know the maximum amount of the deduction he will be allowed on the purchase of Brigid's assets for 2020 Refer to the MACRS Depreciation Tables to answer the following question. Note: Do not round any division. Round other computations to the nearest whole dollar. Assume the equipment has a MACRS recovery period of 7 years and that bonus depreciation is taken in the year of acquisition. The maximum amount of the deduction Petros will be allowed on the purchase of Brigid's assets for 2020 is 39,260 X Frank Table A10-2 MACRS Depreciation for Property Other Than Real Estate Applicable convention: mid-year (applicable methods: 200% or 150% declining balance, switching to straight-line) And the recovery period is If the 5 Years 7 Years 10 Years year is The depreciation rate is 3 Years 15 Years 20 Years recovery 33.33 44.45 14.81 7.41 20.00 32.00 19.20 11.52 11.52 5.76 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4,462 4.461 4.462 4.461 2.231 Table A10-9 MACRS Depreciation for Nonresidential Real Estate Placed in Service after May 12, 1993 Applicable convention: mid-month (applicable recovery period: 39 years) 1 12 If the recovery year is 1 2-39 40 And the month in the first recovery year the property is placed in service is 2 3 4 5 8 9 10 11 The depreciation rate is 2.247 2.033 1.819 1.605 1.391 1.177 0.963 0.749 0.535 0.321 2.564 2.564 2.564 2.564 2564 2.564 2.564 2.564 2.564 2.564 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461 2.564 0.107 0.107 2.564 2.461 Intangible Assets (LO. 10) On April 18, 2020, Petros buys all the assets of Brigid's Muffler Shop. Included in the purchase price of $296,000 is a payment of $19,100 to Brigid not to open a competing shop in the state for a period of 5 years. Brigid's assets at the date of sale are as follows: Asset Adjusted basis Inventory $8,900 Fair Market Value $11,600 31,400 Equipment 3,200 Building 79,500 113,500 Patent 800 13,000 Land 4,900 9,000 The patent is on a special muffler that Brigid developed and patented 5 years ago, Petros would like to know the maximum amount of the deduction he will be allowed on the purchase of Brigid's assets for 2020 Refer to the MACRS Depreciation Tables to answer the following question. Note: Do not round any division. Round other computations to the nearest whole dollar. Assume the equipment has a MACRS recovery period of 7 years and that bonus depreciation is taken in the year of acquisition. The maximum amount of the deduction Petros will be allowed on the purchase of Brigid's assets for 2020 is 39,260 X Frank Table A10-2 MACRS Depreciation for Property Other Than Real Estate Applicable convention: mid-year (applicable methods: 200% or 150% declining balance, switching to straight-line) And the recovery period is If the 5 Years 7 Years 10 Years year is The depreciation rate is 3 Years 15 Years 20 Years recovery 33.33 44.45 14.81 7.41 20.00 32.00 19.20 11.52 11.52 5.76 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4,462 4.461 4.462 4.461 2.231 Table A10-9 MACRS Depreciation for Nonresidential Real Estate Placed in Service after May 12, 1993 Applicable convention: mid-month (applicable recovery period: 39 years) 1 12 If the recovery year is 1 2-39 40 And the month in the first recovery year the property is placed in service is 2 3 4 5 8 9 10 11 The depreciation rate is 2.247 2.033 1.819 1.605 1.391 1.177 0.963 0.749 0.535 0.321 2.564 2.564 2.564 2.564 2564 2.564 2.564 2.564 2.564 2.564 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461 2.564 0.107 0.107 2.564 2.461