Kim Corporation, a calendar year taxpayer, has manufacturing facilities in States A and B. A summary of Kim’s property holdings follows.
|
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) |
Determine Kim’s property factors for the two states assuming that the statutes of both A and B provide that average historical cost of business property is to be included in the property factor.