Sterling Manufacturing began operations on January 1 st , 2018. Balances in Sterlings CCA pools as of
Question:
Sterling Manufacturing began operations on January 1st, 2018. Balances in Sterling’s CCA pools as of January 1st, 2021 are as follows:
Class 1 (10%) 684,000
Class 8 (20%) 253,500
Class 10 (30%) 18,000
Class 10.1 (30%) 17,850
Class 13 (SL) 58,437
Class 50 (55%) 6,000
Class 53 (50%) 75,000
During the year Sterling purchased the following assets:
Office furniture (Class 8) 62,000
New BMW (Class 10.1) 78,000
Customer List (Class 14.1) 200,000
Computers (Class 50) 22,000
Manufacturing Equipment (Class 53) 178,000
2020 Chevrolet Volt (Class 54) 42,000
In 2021 the following assets were sold:
Old furniture (Class 8 – original cost $25,000) 6,000
Delivery Truck (Class 10 – Original cost $52,000 12,000
2016 Acura RLX (Class 10.1 – original cost $71,000) 52,000
Other information:
- The delivery truck disposed of during the year was the only remaining asset in class 10.
- A leasehold improvement for an offsite retail outlet in the amount of $85,000 was incurred in January 2018. The original term of the lease was 5 years with two 3 year renewal terms. The balance in class 13 represents the remaining undepreciated amount from this expenditure.
Calculate the maximum allowable deduction for CCA in 2021 as well as any other Net Income inclusions or deductions resulting from the above noted transactions.
