Assume that TDW Corporation (calendar year-end) has 2021 taxable income of $696,000 for purposes of computing the §179 expense. The company acquired the following assets during 2021: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) AssetPlaced in ServiceBasisMachinerySeptember 12$ 2,275,750Computer equipmentFebruary 10270,475FurnitureApril 2889,775Total $ 3,436,000 What is the maximum amount of §179 expense TDW may deduct for 2021? (713270 is my prev answer and its wrong)

The income of a business that is subject to taxation is referred to as taxable income. Different…

Answered: Assume that TDW Corporation (calendar…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 25P

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Asset	Placed in Service	Basis
Machinery	September 12	$ 2,275,750
Computer equipment	February 10	270,475
Furniture	April 2	889,775
Total		$ 3,436,000

Similar questions

At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial reporting purposes, the asset has a 4-year life with no residual value and is depreciated by the straight-line method beginning in 2019. For tax purposes, the asset is depreciated under MACRS using a 5-year recovery period. Prior to 2019, Conley had no deferred tax liability or asset. The difference between depreciation for financial reporting purposes and income tax purposes is the only temporary difference between pretax financial income and taxable income. The current income tax rate is 30%, and no change in the tax rate has been enacted for future years. In 2019 and 2020, taxable income will be higher or lower than financial income by what amount?
Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is 1,000 and for income tax purposes is 2,000. Turnip is subject to a 30% enacted future tax rate. Prepare a schedule to compute Turnips (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year.
Deferred Tax Liability: Depreciation Gire Company began operations at the beginning of 2019 at which time it purchased a depreciable asset for 60, 000. For 2019 through 2022, the asset was depreciated on the straight-line basis over a 4-year life (no residual value) for financial reporting. For income tax purposes, the asset was depreciated using MACRS (200%, 3-year life). For 2019 through 2022, Gire reported pretax financial income and taxable income of the following amounts (the differences are due solely to the depreciation temporary differences): Over the entire 4-year period, Gire was subject to an income tax of 30%, and no change in the tax rate had been enacted for future years. Required: 1. Prepare a schedule that shows for each year, 2019 through 2022, the (a) MACRS depreciation, (b) straight-line depreciation, (c) annual depreciation temporary difference, and (d) accumulated temporary difference at the end of each year. 2. Prepare Gires income tax journal entry at the end of (a) 2019, (b) 2020, (c) 2021, and (d) 2022. (Round to the nearest dollar.) 3. Prepare the lower portion of Gires income statement for (a) 2019, (b) 2020, (c) 2021, and (d) 2022.

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