In 2007, Tiger Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that cost $268,000. The mid-quarter convention does not apply. Tiger elects to depreciate the maximum under Sec. 179. Tiger's taxable income for the year before the Sec. 179 deduction is $150,000. What is Tiger's total depreciation deductions related to this property?
18. This year, a contractor agrees to build a building for $2,500,000 by the end of next year. The builder's cost is estimated to be $1,800,000. The actual costs this year are $900,000 and next year's actual costs are $1,300,000. Under the percentage of completion method this year's gross profit is:
Question 17: ANSWER b. $112,000
Taxable income after MACRS ...
The solution examines depreciation deductions. The gross profit under percentage is determined for Tiger Corporation.