Chapter $23,$ D$\mathrm{.}1.$a

Taxpayer purchased a new hydraulic lift for use at his car repair shop $($which he operates as a sole proprietorship$).$ He paid $$1,200,000$ and, for tax purposes, the lift has a life of seven years. His business had taxable income $($before taking into consideration the depreciation$)$ of $$1,000,000$ each year. How much depreciation is Taxpayer entitled to claim during each of the next eight years under the following alternative scenarios?

a$.$ Taxpayer makes no elections.

Chapter $23,$ D$\mathrm{.}5$

Taxpayer purchased a shopping center in June. He paid $$1,000,000$ for the building and $$500,000$ for the land. He made no elections.

a$.$ How much depreciation is he entitled to claim in the first year?

b$.$ How much depreciation is he entitled to claim in the second year?

c$.$ How much depreciation is he entitled to claim in the third year?

Chapter $23,$ D$\mathrm{.}7$

Taxpayer purchased a coffee shop on July $1.$ One of the assets she purchased was the customer list. It cost her $$20,000.$ How will she recover the cost of the list?

Chapter $24,$ G$\mathrm{.}1$

Taxpayer owns and operates a small business. This year she sold a piece of equipment used in her business for $$10,000.$ Her adjusted basis in the equipment was$$15,000.$ What are the tax consequences to Taxpayer?