Question;1. George Corporation acquires a business automobile for;$30,000 on December 31 of the current year but does not actually place the automobile into;service until January 1 of the following year. What tax issues should Georgia Corporation;consider?;2. Paula is planning to either purchase or lease a $50,000;automobile.;She anticipates that business use of the auto will be 60%;for the first two years but will decline to 40% in years three through five.;Currently, Paula?s marginal tax rate is 15% but she;anticipates that her marginal tax rate will be 39.6% after a few years.;What tax issues should Paula consider relative to the;decision to purchase or lease the automobile?;3. MACRS 40% Test and Bonus Depreciation. Small Corporation;purchased and placed inservice the following 100% business?use assets (assume all;of the assets were purchased new). Small did not elect Sec. 179 expense on any of these;properties but claimed 50% bonus depreciation on all eligible property in 2013.;? Truck (light?duty, modified non?personal use) costing;$20,000: Placed in service on February 15, 2013 with a 5?year MACRS recovery period.;? Machinery costing $50,000: Placed in service on May 1, 2013;with a 7?year MACRS recovery period.;?Land?costing $60,000: Placed in service on July 1, 2013.;?Building costing $100,000: Placed in service on December 1;2013 with a 39?year MACRS recovery period.;?Equipment costing $40,000: Acquired on December 24, 2013 and;placed in service on January 5, 2014 with a 5?year MACRS recovery period.;What are Small?s total depreciation deductions in 2013 and;2014?;4. Amortization of Intangibles. On January 1 of the current;year, Palm Corporation;purchases the net assets of Vicki?s unincorporated business;for $600,000. The tangible net;assets have a $300,000 book value and a $400,000 FMV. The;purchase agreement states that;Vicki will not compete with Palm Corporation by starting a;new business in the same area for;a period of five years. The stated consideration received by;Vicki for the covenant not to;compete is $50,000. Other intangible assets included in the;purchase agreement are as;follows;? Goodwill: $70,000;? Patents (12?year remaining legal life): $30,000;? Customer list: $50,000;a. How would Vick?s assets be recorded for tax purposes by;Palm Corporation?;b. What is the amortization amount for each intangible asset;in the current year?
Paper#48924 | Written in 18-Jul-2015Price : $22