1a. Geraldine is an accrual basis taxpayer who has the following transactions during the current calendar tax year:
Calculate Geraldine's net income from her business for the current year.
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Accrued business income (except rent)
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$472,000
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Accrued business expenses (except rent)
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$354,000
|
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Rental income on building lease for the next 6 months, received December 1
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$47,200
|
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Prepaid Rent Expense for 6 months, paid on December 1
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$23,600
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1b. Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2016. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Assume half-year convention for tax. Calculate the amount of depreciation for 2016 using:
a. The straight-line depreciation election
b. MACRS tables over the minimum number of years with no bonus depreciation or election to expense.
1c. Give the MACRS depreciation life of the following assets:
An automobile: ______________________
Business furniture: _____________________
A computer: ____________________________
Residential Real Estate: ___________________
Commercial real estate: ____________________
Land: _____________________________