Page 35 Jesse placed equipment that cost $48,000 in service in 2015 (neither § 1
ID: 2576115 • Letter: P
Question
Page 35
Jesse placed equipment that cost $48,000 in service in 2015 (neither § 179 expensing nor bonus depreciation was elected). On July 1, 2017, Jesse sold the equipment for $22,000.
Regular tax and AMT depreciation amounts for the equipment are computed as follows.
Regular Tax
Depreciation
AMT
Depreciation
2015 $ 9,600 $ 7,200
2016 $15,360 $12,240
2017 $ 4,608 $ 4,284
What AMT adjustments will be required for the equipment for 2017?
a. $5,844 positive adjustment depreciation $1,292 positive adjustment equipment sale
b. $324 positive adjustment depreciation $(5,844) negative adjustment equipment sale
c. $648 positive adjustment depreciation $(2,276) negative adjustment equipment sale
d. $324 positive adjustment depreciation $0 adjustment for the equipment sale
Explanation / Answer
Regular tax AMT Difference Cost $48,000 $48,000 Less: Depreciation 2015 9600 7200 2016 15360 12240 2017 4608 4284 Accumulated dep 29568 23724 5844 Book value B $18,432 $24,276 Sales Price S 22000 22000 Profit/(loss) on sale S-B $3,568 ($2,276) $1,292 a) $5844 positive adjustment depreciation, $1292 positive adjustment equipment sale. If any doubt please comment
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