Maris Corporation put into service $ 100,000 of equipment that qualifies for its states 10 percent research

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Maris Corporation put into service $ 100,000 of equipment that qualifies for its state’s 10 percent research credit. To the extent that the credit is claimed, no cost-recovery deductions are allowed. Maris is subject to a 14 percent cost of capital. If the credit were not claimed, the property would qualify for cost-recovery deductions using a three-year life, straight line with no salvage value, and a half-year convention. The state has a flat income tax rate of 8 percent. What is the net value of the tax credit to Maris Corporation?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Federal Tax Research

ISBN: 9781285439396

10th Edition

Authors: Roby Sawyers, William Raabe, Gerald Whittenburg, Steven Gill

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