Ch. 9 Homework Solutions 12

# Ch 9 Homework - SOLUTIONS TO PROBLEM MATERIALS 9-18 Section 1016 requires that the basis of property be adjusted to reflect allowed or allowable

This preview shows pages 1–2. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: SOLUTIONS TO PROBLEM MATERIALS 9-18 Section 1016 requires that the basis of property be adjusted to reflect allowed or allowable depreciation. Although R has not claimed any depreciation on the property, she must reduce the basis by the amount allowable, \$100,000 [(\$100,000 / 30 years) × 30 years]. A gain of \$170,000 results [\$170,000 - (\$100,000 - \$100,000)]. R would receive no benefit from the reduction. [See Reg. § 1.167(a)-10.] 9-28 a. The furniture is seven-year property while the building is nonresidential real estate. Depreciation for 2011 is \$42,811, calculated as follows: Building—\$700,000 × 2.033% \$14,231 (See Exhibit 9.6.) C-7 Furniture—\$200,000 × 14.29% 28,580 (See Exhibit 9.4.) C-2 Total depreciation \$42,811 Or (using the formula), \$700000 /39 Life x 9.5/12 Accounting convention (mid-month) = \$14209 and \$200000-0 Accumulated depreciation /7 Life x 2 Method (DDB) x .5 Accounting convention (half year) = \$28571 b. Depreciation for 2012 is \$66,928, determined as follows: Building—\$700,000 × 2.564% \$17,948 (See Exhibit 9.6.) C-7 Furniture—\$200,000 × 24.49% 48,980 (See Exhibit 9.4.) C-2 Total depreciation \$66,928 Or, \$700000/39 = \$17,949 and (\$200000-28571) /7 x 2 = \$48,980 c. The office building and the furniture were sold on July 20, 2013. In this case, the mid-month convention applies in computing the depreciation for the building, while the half-year convention applies in computing the depreciation for the furniture....
View Full Document

## This note was uploaded on 04/03/2012 for the course TAX 802 taught by Professor Angelini during the Spring '12 term at Suffolk.

### Page1 / 2

Ch 9 Homework - SOLUTIONS TO PROBLEM MATERIALS 9-18 Section 1016 requires that the basis of property be adjusted to reflect allowed or allowable

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online
{"found_math": false, "script_math_tex": 0, "script_math_asciimath": 0, "math_annotations": 0, "math_alttext": 0, "mathml": 0, "mathjax_tag": 0, "mathjax_inline_tex": 0, "mathjax_display_tex": 0, "mathjax_asciimath": 0, "img_math": 0, "codecogs_latex": 0, "wp_latex": 0, "mimetex.cgi": 0, "/images/math/codecogs": 0, "mathtex.cgi": 0, "katex": 0, "math-container": 0, "wp-katex-eq": 0, "align": 0, "equation": 0, "x-ck12": 0, "texerror": 0}