International Fabrication Group (IFG), an accrual basis, calendar year corporation, reported $705,000 net income before tax on its financial statements prepared in accordance with GAAP. IFGs records reveal the following information:

a) The allowance for bad debts as of January 1 was $70,850. Write-offs for the year totaled $17,900, and the addition to the allowance for the year was $19,850. The allowance as of December 31 was $72,800.

b) IFG paid a $24,675 fine to the state of Delaware for a violation of state pollution control laws.

c) IFG was sued by a consumers' group for engaging in false advertising practices. Although IFGs lawyers are convinced that the suit is frivolous, its independent auditors insisted on establishing a $70,500 allowance for contingent legal liability and reporting a $70,500 accrued expense on the income statement.

d) IFG received a $232,650 advanced payment for 10,000 units of inventory on October 20. IFG reported the payment as revenue the following February when the units were shipped.

e) IFG purchased only one asset, a piece of equipment, on November 9 th of the current calendar year. It cost $650,000 and for GAAP purposes was depreciated over a 10-year life, with a $50,000 salvage value. The book depreciation for this asset was $10,000.

f) IFG sold a piece of land on January 30 for $150,000. The cost basis for book and tax purposes was $160,000. This loss is included in the GAAP income listed above. They have no prior capital gains, so they will not car in prior years to take advantage of the carryback rule.

g) IFG sold their previously owned equipment in December and the amount realized was $28,500. The equipment had an initial cost basis of $25,000 and accumulated tax depreciation of $11,815. In the current year, MACRS depreciation exceeded SL depreciation by $4,123.

The CFO has asked you, as the external accountant, to look over the internal accountants answers to the following questions to determine their accuracy. This accountant has made some errors and the CFO is concerned that they would have penalties on understatement of taxes if this return is chosen for an audit.

1.) Determine the correct MACRS depreciation with respect to the new asset purchased.

2.) Determine the correct end of year adjusted tax basis on the new asset and the adjustment to book income.

3.) Determine the correct realized gain or loss on the equipment sold.

4.) Determine the correct character of the amount in #3.

5.) Determine the realized gain or loss on the sale of the land.

6.) Determine the correct character of the amount in #5.

7.) Determine capital gain/loss recognized on the tax return and the capital loss carryforward.

8.) Determine IFGs correct book tax differences to calculate taxable income based on the information above.

9.) Determine IFGs correct tax due using the current 2022 tax rate per the IRS. Note: Round all intermediate calculations to the nearest dollar before continuing to the next calculation.