Dean and Ellen Price are married and have a manufacturing business.
They bought a piece of business equipment (7-year personal property) on 4/1/2018 for $50,000. Use half-year convention to calculate the MACRS depreciation deduction on the equipment for 2018 and 2019
They also has a pick-up truck used for business (5-year recovery period) acquired on 8/23/2018 for $25,000. On 11/15/2019, he sold the pick-up truck for $24,000. Use the half-year convention to calculate the MACRS depreciation on the truck for 2018 and 2019.
On 10/26/2019 Dean sold his old storage building used for his business for $220,000. They purchased the building in 2001 for $100,000. Total depreciation (accumulated depreciation) taken on the building is $20,000.
His 2019 Business income and expenditures (Schedule -C):
Sales $ 657,500
Cost of goods sold $ 315,000
Other business expenses (incl. deprecation taken on the storage building) $ 140,000
In 2019 Dean also sold various assets. The information about the selling price and depreciation of the property is listed below.
|
Placed in Service / Purchased on |
Sold on
|
Initial Cost
|
2019 Depr. Amount
|
Accumulated
Depreciation. (Depr. Allowed)
|
Tax Basis= Initial Cost – Depr. Allowed
|
Office tables |
4/4/2018
|
10/16/2019
For $2,900
|
$3,000
|
$375
|
$825 |
|
Office chairs |
3/1/2015
|
11/8/2019
For $4,000
|
$8,000
|
$1,000
|
$2,200 |
|
Marketable securities |
2/1/2019
|
12/1/2019
For $20,000
|
$12,000
|
$0
|
$0 |
|
Land held for investment |
7/1/2018
|
11/29/2019
For $48,000
|
$45,000
|
$0
|
$0 |
|