On August 20, 2011, May Signed a 10-Year Lease on a Building

question 51

Essay

On August 20, 2011, May signed a 10-year lease on a building for her business.On November 28, 2012, May paid $80,000 for a qualified leasehold improvement to the building.She takes additional first-year depreciation.What is May's cost recovery deduction for the improvement in 2012?

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Definitions:

Smooth ER

The smooth endoplasmic reticulum is a membrane-enclosed organelle found in eukaryotic cells, involved in lipid synthesis, detoxification, and calcium ion storage.

Phospholipids

A type of lipid molecule that forms the primary component of all cell membranes, consisting of two fatty acids and a phosphate group attached to glycerol.

Cell Membranes

Cell membranes are thin, flexible barriers that surround cells, regulating the passage of substances in and out of the cell, and providing structural support.

Vacuoles

Membrane-bound organelles in cells, particularly plant cells, which are involved in storage and maintenance of cellular homeostasis.