-In March 2018, Zenia acquired a new automobile for $76,000 and used the automobile 70% for business. In 2019 her business use of the auto was 80%. Zenia's depreciation deduction for 2019 will be
A) $11,200.
B) $17,442.
C) $12,800.
D) $6,168.
-On January l, Grace leases and places into service an automobile with a FMV of $61,000. The business use of the automobile is 60%. The "inclusion amount" for the initial year of the lease from the IRS tables is $30. The annual lease payments are $11,000. What are the tax consequences of this lease?
A) deduction for lease payments of $6,582
B) deduction for lease payments of $6,570
C) deduction for lease payments of $6,600
D) deduction for lease payment of $6,630
-On January 1, 2018, NEIU Corporation acquires all of the net assets of Green Corporation for $4,500,000. The following intangible assets are included in the purchase agreement:
Assets |
Acquisition Cost |
Goodwill and going concern value |
$200,000 |
Licenses |
$ 100,000 |
Patents |
$ 150,000 |
Covenant not to compete for five years |
$180,000 |
What is the total amount of amortization allowed in 2018?
A) $15,000
B) $22,000
C) $31,000
D) $42,000
1.
$76,000 × 21%(depreciation) = $16,000
$16,000 × 80% = $12,800.
Option C is correct
2.
Lease payments of $11,000 × 60% = $6600 are initially allowed. The inclusion amount is $20 × 60% = $12.
Therefore,
$6600 - $12 = $6582
Option A is correct
3.
Calculation of Total amount of amortization
All intangible assets qualify as Section 197 intangible assets are amortized for 15 years. So, the total amortization is:
Total amount amortization=[$200,000+$100,000+$150,000+$180,000/15]
=> [$330,000/15]
Total amount of amortization = $42,000
Option D is correct
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