Mike Brady purchased a commercial office building on June 22, 2021, for a total of $3 million of which $550,000 was the value of the land on which the commercial office building was located. In addition, Mike purchased 7-year class new business equipment for $28,300 on September 10, 2021. He elects not to immediately expense the equipment under 179 and

Sep 8, 2023

Mike Brady purchased a commercial office building on June 22, 2021, for a total of $3 million of which $550,000 was the value of the land on which the commercial office building was located.
In addition, Mike purchased 7-year class new business equipment for $28,300 on September 10, 2021. He elects not to immediately expense the equipment under §179 and elects not to take the additional first-year depreciation.

Mike purchased no other business assets during 2021.

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Mike Brady purchased a commercial office building on June 22, 2021, for a total of $3 million of which $550,000 was the value of the land on which the commercial office building was located. In addition, Mike purchased 7-year class new business equipment for $28,300 on September 10, 2021. He elects not to immediately expense the equipment under 179 and
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a. Determine Mike’s depreciation on the commercial office building for 2021.

b. Determine Mike’s depreciation on the equipment for 2021.

c. If Mike sells the commercial office building on October 2, 2030, how much depreciation deduction will Mike take for the commercial office building for 2030?

d. If Mike sells the equipment on December 28, 2022, how much depreciation deduction will Mike take for the equipment for 2022?

During 2021, Bobby Brady rented his vacation home for 75 days and stayed in his vacation home for 25 days.  Gross rental income from the property was $8,200.  Bobby incurred the following expenses: mortgage interest, $4,600; real estate taxes, $1,300; utilities, $950; maintenance, $450; and depreciation, $4,000

Using the IRS’s approach, compute:

 Bobby’s net rent income or loss, showing all calculations (his realized amount). The amount(s), if any, that Bobby will report on his Schedule A as an itemized deduction.

 3. Any carryover amounts.

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