During 2020, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business:ItemDate AcquiredCostManufacturing equipment (7 year)June 2$50,000Office furnitureSeptember 158,000Office computerNovember 182,000Passenger automobile (used 85 percent for business)May 3155,000WarehouseJuly 23 Building 170,000 Land 135,000 Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense and elects out of a bonus depreciation.Use Form 4562 to report Pepe's depreciation expense for 2020.

The solution is based on the MACRS general depreciation system (GDS), and all assets are non-farm…

Answered: Acquired Cost Manufacturing equipment…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 15MCQ

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During 2020, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business:

*Item*	*Date Acquired*	*Cost*
Manufacturing equipment (7 year)	June 2	$50,000
Office furniture	September 15	8,000
Office computer	November 18	2,000
Passenger automobile (used 85 percent for business)	May 31	55,000
Warehouse	July 23
Building		170,000
Land		135,000

Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense and elects out of a bonus depreciation.

Use Form 4562 to report Pepe's depreciation expense for 2020.

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Acquired Cost Manufacturing equipment (7 year) June 2 $50,000 Office furniture September 15 8,000 Office computer November 18 2,000 Passenger automobile (used 85 percent for business) May 31 55,000 Warehouse July 23