Question: Please help, and explain. Conor started a new construction business in April 2018. In connection with the new business, he purchased a new backhoe for

Please help, and explain.

Conor started a new construction business in April 2018. In connection with the new business, he purchased a new backhoe for $60,000 in June 2020 and immediately placed it in service. The new business is struggling and expecting to show a loss for 2020. Conor is considering expensing the $60,000 cost of the backhoe under 179 on the 2020 tax return. Conor has been awarded a large project for 2021, and will show a substantial profit (over $100,000) for the year ending 12/31/2021. Please advise and response must fully address the following:

Evaluate the appropriateness of Conor's plan.
Explain your position.
How could changes in tax law affect the appropriateness of Conor's plan?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Conor started a new construction business in April 2020. In connection with the new business, he purchased a new backhoe for $60,000 in June 2020 and immediately placed it in service. The new...

Brett started a new construction business in April 2018. In connection with the new business, he purchased a new backhoe for $60,000 in June 2018 and immediately placed it in service. The new...

Brett started a new construction business in April 2018. In connection with the new business, he purchased a new backhoe for $60,000 on June 2018 and immediately placed it in service. The new...

Brett started a new construction business in April 2017. In connection with the new business, he purchased a new backhoe for $60,000 in June 2017 and immediately placed it in service. The new...

Brett started a new construction business in April 2019. In connection with the new business, he purchased a new backhoe for $60,000 in June 2019 and immediately placed it in service. The new...

Brett started a new construction business in April 2016. In connection with the new business, he purchased a new backhoe for $60,000 in June 2016. The new business is struggling and expecting to show...

A worker views leisure and income as goods and has an opportunity to work at an hourly wage of $ 15 per hour. a. Illustrate the workers opportunity set in a given 24- hour period. b. Suppose the...

Profit maximization does not always lead to wealth maximization because it does not consider the riskiness of the cash flows. it does not consider the timing of the cash flows. it does not consider...

Which of the following are components of a classified balance sheet? ( check all that apply ) Stockholders' equity Expenses Current liabilities Property, Plant and Equipment Revenues Long - term...

In the Blake and Mouton Leadership Grid , q , reflects a high concern for people and a low concern for the task. Select one: a . team management b . authority - obedience management c . country club...

Following Buddy Dogs shift in competitive strategy, what must the companys HR professionals consider?

How might HR professionals help build upon the companys strengths and capitalize on its opportunities? How might they help address some of the weaknesses and threats? Explain.

What kinds of challenges could Buddy Dog face in the areas of recruitment, training, and compensation?