John Rivera, age $31,$ is single and has no dependents. At the beginning of $2024,$ John started his own excavation business and hamed it

Earth Movers. John lives at $1045$ Center Street, Lindon, UT$,$ and his business is located at $381$ State Street, Lindon, UT$,$ The Zip Code for

Doth addresses is $84042.$ John's Social Security number is $111-11-1111,$ and the business identification number is $11-1111111.$ John is a

cash basis taxpayer. During $2024,$ John reports the following items in connection with his business:

During $2024,$ John recorded the following additional items:

Johin wants to maximize his cost recovery deductions $($including taking any $5179$ expense and any available additional first$-$year

depreciation$).$

On October $8,2024,$ John inherited IBM stock from his Aunt Mildred. John had been her favorite nephew. According to the data provided by

the executor of Aunt Mildred's estate, the stock was valued for estate tax purposes at $$110,000.$ John is considering selling the IBM stock

for $$125,000$ on December $29,2024,$ and using $$75,000$ of the proceeds to purchase an BMW X$5.$ He would use the car $100\%$ for business.

John wants to know what effect these transactions would have on his $2024$ adjusted gross income.

Write a letter to John in which you present your calculations. Ignore any Federal self$-$employment tax implications.

SWFT$,$ LLP

$5191$ Natorp Boulevard

Mason, OH $45040$

December $21,2024$

Mr$.$ John Rivera

$1045$ Center Street

Lindon, UT B$4042$

Dear Mr$.$ Rivera:

I am writing in response to your request concerning the effects on your $2024$ adjusted gross income of selling IBM stock and

using some of the proceeds to purchase an automobile to be used in your business.

If you do not sell the stock and purchase the car, your adjusted gross income will bes

X$.$ If you sell the stock

and purchase the BMW$,$ your adjusted gross income will decrease $,$ to $s$

Should you want more information or need us to darify our calculations, please contact us$.$

Sincerely,

Mosita $1$ Sianchey CPA

$2$ mare Check My Work uses remaining.