Question

1.John donated appreciated capital stock that he has held over a year, with an adjusted basis of $20,000 and a FMV of $50,000, to a local qualified charity. His AGI for the year was $80,000. How much of John’s contribution is tax deductible?

2.

On June 1, 2019, Amy purchased the following business assets:

            1. Equipment for $12,000;

            2. Computer for $2,300;

            3. Office building for $220,000.

Calculate 2019 depreciation (ignore Section 179/Bonus depreciation).

3. Becky purchased a Tesla for $100,000 to be used exclusively for business. Calculate the first year’s allowable depreciation deduction: a) without bonus depreciation; and b) with bonus depreciation.

Answer 1

1. As the John has donated the property to the local qualified charity whose FMV is $50000 and value on adjusted basis is $20000. According to the federal tax deduction for charitable donations, if you donate non-cash items, you can claim the FMV of the items on your taxes. Hence in our case John can claim $50000 as deduction from his income.

2.calculation of depreciation for year 2019 if Amy purchased assets on 1 june,2019 is as under:

Please mention the method of depreciation used here for calculation????

3. Assuming that becky purchased a Tesla after 31 dec. 2017, the first year's allowable depreciation deduction in two scenario i.e. a) without bonus depreciation is $10000 b) with bonus depreciation means claiming 100% bonus then depreciation in first year is $18,000.