Question
Part 4 Dean and Ellen Price are married and have a manufacturing business. They bought a piece of business equipment (7-year personal property) on 4/1/2018
Part 4
Dean and Ellen Price are married and have a manufacturing business.
They bought a piece of business equipment (7-year personal property) on 4/1/2018 for $50,000. Use half-year convention to calculate the MACRS depreciation deduction on the equipment for 2018 and 2019
They also has a pick-up truck used for business (5-year recovery period) acquired on 8/23/2018 for $25,000. On 11/15/2019, he sold the pick-up truck for $24,000. Use the half-year convention to calculate the MACRS depreciation on the truck for 2018 and 2019.
On 10/26/2019 Dean sold his old storage building used for his business for $220,000. They purchased the building in 2001 for $100,000. Total depreciation (accumulated depreciation) taken on the building is $20,000.
His 2019 Business income and expenditures (Schedule -C):
Sales $ 657,500
Cost of goods sold $ 315,000
Other business expenses (incl. deprecation taken on the storage building) $ 140,000
In 2019 Dean also sold various assets. The information about the selling price and depreciation of the property is listed below.
|
| Placed in Service / Purchased on | Sold on | Initial Cost | 2019 Depr. Amount | Accumulated Depreciation. (Depr. Allowed) |
Tax Basis= Initial Cost Depr. Allowed |
| Office tables |
4/4/2018 |
10/16/2019 For $2,900 |
$3,000 | $375 |
$825 |
|
| Office chairs | 3/1/2015 | 11/8/2019 For $4,000 | $8,000 | $1,000 | $2,200 |
|
| Marketable securities | 2/1/2019 | 12/1/2019 For $20,000 | $12,000 | $0 | $0 |
|
| Land held for investment | 7/1/2018 | 11/29/2019 For $48,000 | $45,000 | $0 | $0 |
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In 2019 Dean sold his wine collection for $9,000, which is bought two years ago for $8,000.
- They also has a short-term capital loss carryover of $10,000 from 2009.
Part IV: Netting Process
| Short-term Capital Gains and Loss Carry-overs | Long-term Capital Gain (LTCG) | |||
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| Collectibles | Unrecaptured 1250 Gain | Net Sec. 1231 Gain | Other Long-term capital gain |
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| Net the Short-term Capital Gain or Losses above = _______
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| Amount from Part II, 4(b) __________ | Amount from Part II, 4(c) ________
| Part III, Net LTCG, excluding Collectibles _____ |
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| Use the above amount to net against Collectibles, Unrecaptured Sec. 1250 Gain, LTCG, etc. on the right
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| Net Capital Gain: | ||||
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Cost management a strategic approach
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
5th edition
73526940, 978-0073526942
