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PRINCIPLES OF TAXATION F/BUS.+INVEST.
22nd Edition
ISBN: 9781259917097
Author: Jones
Publisher: MCG
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Textbook Question
Chapter 8, Problem 26AP
Firm OCS sold business equipment with a $20,000 initial cost basis and $7,315
- a. Amount realized was $10,000.
- b. Amount realized was $13,000.
- c. Amount realized was $17,500.
- d. Amount realized was $22,500.
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Students have asked these similar questions
Firm OCS sold business equipment with a $23,000 initial cost basis and $10,015accumulated tax depreciation. In each of the following cases, compute OCS’srecaptured ordinary income and Section 1231 gain or loss on the sale.Required:a. Amount realized was $10,600.b. Amount realized was $13,600.c. Amount realized was $18,100.d. Amount realized was $26,100
In year 1, Firm A paid $49,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,040 and $6,600
depreciation with respect to the asset. Firm A's marginal tax rate in both years was 21 percent.
Required:
a. Compute Firm A's net cash flow attributable to the asset purchase in each year.
b. Compute Firm A's adjusted basis in the asset at the end of each year.
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute Firm A's net cash flow attributable to the asset purchase in each year.
Note: Cash outflows should be indicated by a minus sign. Round your intermediate calculations and final answers to nearest
whole dollar amount.
Before-tax cash flows
Tax (cost) or savings
Net cash flow
Year 1
Year 2
CTT Limited has an asset which cost $300 with related accumulated depreciation of $100. The accumulated depreciation for tax purposes is $180 and the company tax rate is 30%. The tax base of this asset is:
Question 3Answer
a.
$120
b.
$20
c.
$80
d.
$220
Chapter 8 Solutions
PRINCIPLES OF TAXATION F/BUS.+INVEST.
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