Determine Kim property factors for the two states

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Reference no: EM132664174

Problem - Kim Corporation, a calendar year taxpayer, operates manufacturing facilities in States A and B. A summary of Kim's property holdings follows.

 

Beginning of Year

 

State A

State B

Total

Inventory

$300,000

$200,000

$500,000

Plant and equipment

2,500,000

1,500,000

4,000,000

Accumulated depreciation: plant and equipment

(1,000,000)

(600,000)

(1,600,000)

Land

600,000

1,000,000

1,600,000

Rental property

900,000

300,000

1,200,000

Accumulated depreciation: rental property

(200,000)

(90,000)

(290,000)

 

 

End of Year

 

State A

State B

Total

Inventory

$400,000

$200,000

$600,000

Plant and equipment

2,800,000

1,200,000

4,000,000

Accumulated depreciation: plant and equipment

(1,200,000)

(650,000)

(1,850,000)

Land

600,000

1,200,000

1,800,000

Rental property

1,000,000

300,000

1,300,000

Accumulated depreciation: rental property

(250,000)

(100,000)

(350,000)

Required - Determine Kim's property factors for the two states. The statutes of both A and B provide that average historical cost of business property is to be included in the property factor.

Reference no: EM132664174

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