Accounting Help Needed

1. Byron entered into a 36-month lease of an automobile on March 1, year 1. He used it 80 percent ;for business and 20 percent for personal use. In year 2 he used it 90 percent for business and 10 percent for personal use. The fair market value of the automobile at the inception of the lease was $60,000. Byron made 10 monthly lease payments of $660 in year 1 and 12 monthly payments in year 2. The IRS lease inclusion table amounts are $80 for the first year and $160 for the second year.

a. What is Byron’s deduction for lease payments made during year 1? ;

b. What is his deduction for year 2? ;

c. What is the lease inclusion amount that Byron must include in his gross income for year 1? ;

d. What amount must he include in income for year 2? ;

2. ;Kondar Corporation (a calendar-year taxpayer) spent $2,050,000 to purchase used machinery in February 2014.

a. What was the maximum that Kondar could elect to expense under Section 179? ;

b. What was the basis for calculating regular MACRS depreciation on this machinery if the maximum Section 179 deduction was elected? ;

c. What was Kondar’s total depreciation deduction for 2014? ;

d. What is Kondar’s depreciation deduction for this machinery for 2015? ;