EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the following assets, all of which were held for more than 12 months: Accumulated Initial Basis Depreciation* Machinery $ 97,500 $ 39,660 Office equipment Warehouse Sale Price $ 70,000 57,500 125,000 50,000 12,470 163,500 21,620 72,700 n/a Investment securities Investment land 83,100 350,000 n/a 328,000 *Through date of sale. EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses. Required: a. Compute EzTech's taxable income. b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute EzTech's taxable income. Taxable income < Required A Required B
EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the following assets, all of which were held for more than 12 months: Accumulated Initial Basis Depreciation* Machinery $ 97,500 $ 39,660 Office equipment Warehouse Sale Price $ 70,000 57,500 125,000 50,000 12,470 163,500 21,620 72,700 n/a Investment securities Investment land 83,100 350,000 n/a 328,000 *Through date of sale. EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses. Required: a. Compute EzTech's taxable income. b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute EzTech's taxable income. Taxable income < Required A Required B
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 21P
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Question
100%
EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the
following assets, all of which were held for more than 12 months:
Machinery
Office equipment
Warehouse
Investment securities
Investment land
Accumulated
Initial Basis Depreciation *
$ 97,500
$ 39,660
50,000
12,470
163,500
21,620
72.700
n/a
350,000
n/a
Sale Price
$
70,000
57,500
125,000
83,100
328,000
*Through date of sale.
EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses.
Required:
a. Compute EzTech's taxable income.
b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment.
Transcribed Image Text:EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the
following assets, all of which were held for more than 12 months:
Accumulated
Initial Basis Depreciation*
Machinery
$ 97,500
$ 39,660
Sale Price
$ 70,000
57,500
Office equipment
Warehouse
50,000
12,470
163,500
21,620
125,000
72,700
n/a
Investment securities
Investment land
83,100
350,000
n/a
328,000
*Through date of sale.
EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses.
Required:
a. Compute EzTech's taxable income.
b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment.
Complete
question
entering your answers in the tabs below.
Required A Required B
Compute EzTech's taxable income.
Taxable income
< Required A
Required B >
Transcribed Image Text:EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the
following assets, all of which were held for more than 12 months:
Accumulated
Initial Basis Depreciation*
Sale Price
Machinery
$ 97,500
$ 39,660
office equipment
Warehouse
$ 70,000
57,500
12,470
50,000
163,500
21,620
125,000
72,700
n/a
Investment securities
Investment land
83,100
350,000
n/a
328,000
*Through date of sale.
EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses.
Required:
a. Compute EzTech's taxable income.
b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment.
Complete this question by entering your answers in the tabs below.
Required A Required B
Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment.
Taxable income
< Required A
Required B
>
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