Compute herelt adjusted basis in the equipment on december

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Question - Herelt Incorporated, a calendar year taxpayer, purchased equipment for $394,400 and placed it in service on April 1, 2021. The equipment was seven-year recovery property, and Herelt used the half-year convention to compute MACRS depreciation. Use Table 7-2 is attached.

Required -

1. Compute Herelt's MACRS depreciation with respect to the equipment for 2021 and 2022.

2. Compute Herelt's adjusted basis in the equipment on December 31, 2022.

3. Compute Herelt's MACRS depreciation for 2023 if it disposes of the equipment on February 9, 2023.

Reference no: EM133188852

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