Santa Fe purchased the rights to extract turquoise on a trac…
Santa Fe purchased the rights to extract turquoise on a tract of land over a five-year period. Santa Fe paid $300,000 for extraction rights. A geologist estimated that Santa Fe will recover 5,000 pounds of turquoise. During the past several years, 4,000 pounds were extracted. During the current year, Santa Fe extracted 1,500 pounds of turquoise, which it sold for $250,000. What is Santa Fe’s cost depletion deduction for the current year?
Read DetailsBluff purchased equipment for business use for $35,000 and m…
Bluff purchased equipment for business use for $35,000 and made $1,000 of improvements to the equipment. After deducting depreciation of $5,000, Bluff gave the equipment to Russet for business use. At the time of the gift was made, the equipment had a fair market value of $32,0000.Ignoring gift tax consequences, what is Russet’s basis in the equipment?
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