MNO is a calendar year taxpayer. On March 1, MNO signed a 36-month lease on 2,100...

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MNO is a calendar year taxpayer. On March 1, MNO signed a 36-month lease on 2,100 square feet of commercial office space. It paid a $3,240 fee to the real estate agent who located the space and negotiated the lease and $8,800 to install new overhead lighting in the office space. Lighting equipment is seven-year recovery property. Required: Compute MNO's first-year cost recovery deduction with respect to the $12,040 cost relating to the lease space, assuming no Section 179 deduction or bonus depreciation. Use Table 7.2. Note: Round intermediate computations to the nearest whole dollar amount. Cost recovery deduction TABLE 7.2 MACRS for Business Personalty (Half-Year Convention) Recovery Period 7-Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 3-Year 33.33% 44.45 14.81 7.41 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 10-Year Depreciation Rate 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.5 6.55 3.28 15-Year 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 MNO is a calendar year taxpayer. On March 1, MNO signed a 36-month lease on 2,100 square feet of commercial office space. It paid a $3,240 fee to the real estate agent who located the space and negotiated the lease and $8,800 to install new overhead lighting in the office space. Lighting equipment is seven-year recovery property. Required: Compute MNO's first-year cost recovery deduction with respect to the $12,040 cost relating to the lease space, assuming no Section 179 deduction or bonus depreciation. Use Table 7.2. Note: Round intermediate computations to the nearest whole dollar amount. Cost recovery deduction TABLE 7.2 MACRS for Business Personalty (Half-Year Convention) Recovery Period 7-Year Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 3-Year 33.33% 44.45 14.81 7.41 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 10-Year Depreciation Rate 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.5 6.55 3.28 15-Year 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231

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To compute MNOs firstyear cost recovery deduction for the lease space we need to determine the appro... View the full answer