On January 2nd of the current year for $300,000 Depreciator purchases new equipment for use in her
Question:
On January 2nd of the current year for $300,000 Depreciator purchases new equipment for use in her business. The purchased is made from an unrelated person. The equipment has a 6-year class life and is 5-year property under § 168(c). Depreciator plans to use the equipment for seven years, and expects it to have a salvage value of $30,000 at the end of that time. Depreciator is a single, calendar year taxpayer, and she uses the equipment only in her business. In the following Problems, compute the depreciation deductions with respect to the equipment in each of the years of its use and determine Depreciator's adjusted Basis for the equipment at the end of each of those years.
A. Depreciator elects out of §168(k) and does not elect §179.
B. Same as except that Depreciator elects under § 168 to use the straight-line method of the equipment and all other property in its class placed in service during the year.
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold