Required information [The following information applies to the questions displayed below.] Burbank Corporation (calendar-year-end) acquired the...
Required information
[The following information applies to the questions displayed below.]
Burbank Corporation (calendar-year-end) acquired the following property this year: (Use MACRS Table 1, Table 2, and Exhibit 10-10.) (Round your answer to the nearest whole dollar amount.)
| Asset | Placed in Service | Basis | |
| Used copier | November 12 | $ | 7,800 |
| New computer equipment | June 6 | 14,000 | |
| Furniture | July 15 | 32,000 | |
| New delivery truck | October 28 | 19,000 | |
| Luxury auto | January 31 | 70,000 | |
| Total | $ | 142,800 | |
Burbank acquired the copier in a tax-deferred transaction when the shareholder contributed the copier to the business in exchange for stock.
a. Assuming no bonus or §179 expense, what is Burbank’s maximum cost recovery deduction for this year?
Homework Answers
a) Calculation of Maximum cost recovery deduction for this year :-
| Assets | Purchase Date | Qtr | Recovery Period | Original Basis | Rate | Cost Recovery |
| Used Copier | Nov. 12 | 4 | 5 year | 7800 | 5% | 390 |
| New Computer Equipment | June 6 | 2 | 5 year | 14000 | 25% | 3500 |
| Furniture | July 15 | 3 | 7 year | 32000 | 10.71% | 3427 |
| New Delivery Truck | Oct. 28 | 4 | 5 year | 19000 | 5% | 950 |
| Luxury Auto | Jan. 31 | 70000 | As per limit | 3160 | ||
| Total | 11427 |
Maximum cost recovery deduction = $11427
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