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hram777 [196]
3 years ago
12

Last year, a corporation purchased an office building for $220,000, of which $30,000 was allocated to the land on which the buil

ding was locateD. The building's salvage value was estimated to be $50,000. The corporation's current year depreciation deduction for the building is:
Business
1 answer:
Alex_Xolod [135]3 years ago
5 0

Answer:

$4872

Explanation:

Given: Purchase price of an office building= $220000.

           Out of cost building, $30000 was allocated to the land.

Remember, As per current US Tax code, commercial building can be depreciated over 39-year straight-line for commercial property.

Now, calculating the current year depreciation deduction.

We know, land is not depreciable.

∴ Cost of building= Purchase\ price\ of\ building - cost\ of\ land

⇒ Cost of building= \$ 220000 - \$ 30000

∴ Cost of building= \$ 190000

Next calculating depreciation using straight line method ignoring salvage value.

Depreciation deduction= \frac{\$ 190000}{39}

∴ Depreciation deduction= \$ 4872

Hence, The corporation's current year depreciation deduction for the building is $4872

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A) $0

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as per IRC section 101g, if the payment exceeds the greater of per actual cost then the excess payment amount will be taxable.

total tax free payment = 360*30

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3 years ago
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If an economy moves into a recessionary period, examples of fiscal policies that act as automatic stabilizers include?
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1 year ago
Which of the following identifies the portion of.people in the United States working in agribusiness
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d (i). Suppose that ZX Inc. is currently selling at $50 per share. You buy 200 shares, using $5,000 of your own money and borrow
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-21%

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Initial share price = $50

Share price after 1 year = $46

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