1) John purchases an office building March 15, 2013 to us in his computer consulting business. The price of the property is $120,000. he pays $15,000 in cash and signs a 30 year, 10% mortgage for the remainder. For the property tax purposes, the land is assess at $10,000 and the building at $30,000.
2) John was employed by Computer Corp. as a consultant before starting his own business. Computer Corp.lets John purchase the computer equipment in his office for use in his business. He makes the purchase on April 3, 2013. The Fair Market Value of the equipment is $20,000 but John pays $16,000 to Computer Corp. Computer Corp.'s original basis in the equipment was $36,000 and its adjusted basis at the time of the transfer to John is $8000.
3) John takes the color printer that the children have been using at the home to use in the office in his consulting business. The original price of the printer was $8000 but it is worth $4000 when it is concerted to business use on April 2, 2013.
4) On March 30, 2013 John buys office furniture to use in his business for $2,200.
5) In January Mary purchases a new car to use in her real estate business. She pays $19,500 for the car and $1,500 to have a sunroof installed in it. During the year, se drives the car 6800 miles for business ad 3200 for personal use.
6) Mary uses a room in her home exclusively and regularly as an office. The room is 12 feet by 12 feet. The total area in the hoe is 2,400 square feet. Mary purchased office furniture for $800 when she started using the office in the home in June 2008. She paid $140,000 for the property in 2003, of which $20,000 is allocated to the land.
7) Mary owns a rental house. She acquired the house from her former husband in 2004 as part of their divorce settlement. Mary and her former husband paid $50,000 for the house (which becomes her basis in the property) in 1997. Mary estimates the property increased in vale to $80,000 ($70,000 for the house, $10,000 for the land) when it was converted to rental property in October 2005.
8) Mary inherits 20 shares of stock in Desmond, Inc. from her uncle who paid $700 for in in 1981. At the date of the uncle's death the stock was worth mce_markernbsp;14,000. She finally received the stock from the estate two months later when the stock is worth $14,500.
9) On July 21, 2008, John's father gave him 100 shares of stock in Flex Corp. His father paid $35 per share in June 1999. The fair market value at the date of the gift was $45 per share.
10) The United Express Company begins business in August 2013 by purchasing the assets listed in the table below. If United Express elects not to claim bonus depreciation, calculate the maximum MACRS depreciation on the assets.
Asset Cost
Truck $98,000
Tractor $55,000
Office Equipment 466,000
Chen Corp. purchase the following business asset during the year:
Date Recovery
Asset: Purchased Cost Period
Office furniture 15 Jan 13 $480,000 7
Computer 1 Apr 13 mce_markernbsp; 60,000 5
Tug boat 21 Jul 13 $503,000 10
Assuming Chen elect not to claim bonus depreciation, what is the maximum current year cost recovery deduction on the asset purchased? (Don't forget about maximizing Sec 179)