Instructions : Choose the best multiple choice answer and explain why you chose
ID: 2564282 • Letter: I
Question
Instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.
PART A
On June 2, 2016, Sal places in service a new automobile that cost $60,000. The car is used 80% for business and 20% for personal use. (Assume this percentage is maintained for the life of the car.) Sal does take additional first-year depreciation. Determine the cost recovery deduction for 2016.
a.
$8,800.
b.
$30,000.
c.
$28,800.
d.
$7,742.
e.
None of the above.
PART B
Sam purchased a hotel building on May 17, 2016, for $6,000,000, of which $1,000,000 was for land. Determine the cost recovery deduction for 2016.
a.
$128,200.
b.
$102,560.
c.
$152,400.
d.
$127,000.
e.
None of the above.
a.
$8,800.
b.
$30,000.
c.
$28,800.
d.
$7,742.
e.
None of the above.
Explanation / Answer
ans 1 None of the above MACRS cost recovery (80000*80%*20%) 12800 Limited to 3160*.8 2528 Dep rate=200%*1/5* 1/2 year=20% cost recovery=$2528 ans 2 Hote building cost 6000000 Put to use May-16 Dep rate 1.605% Dep expenses 96300 e) None of the above