Exam 7: Property Acquisitions and Cost Recovery Deductions

The basis in property acquired by inheritance is normally its fair market value at the date of the decedent's death.

(True/False)

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Question 23

Sanjuro Corporation (a calendar-year corporation) purchased and placed in service the following assets during 2018: All assets are used 100% for business use. The warehouse building does not include the cost of the land on which it is located which was an additional $1,000,000. The corporation has $3,000,000 income from operations before calculating depreciation deductions. Sanjuro Corporation made whatever elections were necessary to maximize its overall depreciation deduction for 2018. What would be Sanjuro Corporation's cost recovery deduction for the warehouse for 2019 if it is sold in November of 2019?

(Multiple Choice)

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Question 24

When fully depreciating 7-year property, the final year of depreciation will be year:

(Multiple Choice)

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Question 25

What is a mixed-use asset? What adjustment must be made for depreciating a mixed-use asset?

(Essay)

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Question 26

The alternative depreciation system uses a straight-line allocation of an asset's cost to determine depreciation expense.

(True/False)

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Question 27

On June, 20, 2018, Simon Corporation (a calendar-year corporation) purchased and placed in service a new automobile costing $68,000. This vehicle is used 100% for business. Simon makes whatever elections are necessary to maximum its overall depreciation deduction for the year of acquisition. What is Simon Corporation's adjusted basis for the automobile at the end of 2020?

(Multiple Choice)

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Question 28

Explain how the basis of an asset is determined on acquisition.

(Essay)

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Question 29

YumYum Corporation (a calendar-year corporation) moved into a new office building adjacent to its manufacturing plant in 2018. It purchased and placed in service the following assets during 2018: All assets are used 100% for business use. The office building does not include the cost of the land on which it is located that was an additional $300,000. The corporation had $900,000 income from operations before calculating depreciation deductions. What is the maximum Section 179 deduction YumYum can claim for 2018?

(Multiple Choice)

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Question 30

MACRS depreciation for 5-year assets is based on:

(Multiple Choice)

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Question 31

What is the maximum amount that can be spent on depreciable personalty in the last quarter of 2018 to avoid the mid-quarter convention if $240,000 of equipment was purchased in the first three quarters?

(Multiple Choice)

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Question 32

Zachary purchased a new car on August 1, 2017 for $14,500. His records indicate that he uses the car 45 percent for business and 55 percent for personal use. What are his cost recovery deductions for 2017 and 2018?

(Multiple Choice)

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Question 33

Chipper, a calendar-year corporation, purchased new machinery for $1,135,000 in February, 2018. In October, it purchased $2,105,000 of used machinery. What was Chipper's maximum cost recovery deduction for 2018?

(Multiple Choice)

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Question 35

If more than 40 percent of all personalty purchased during the year is placed in service during the last quarter of the year, the mid-quarter convention must be used.

(True/False)

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Question 36

What are the permissible tax treatments for research and experimentation expenditures?

(Essay)

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Question 37

The only acceptable convention for MACRS realty is

(Multiple Choice)

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Question 38

Moore Corporation (a calendar-year taxpayer), acquired a 5-year asset costing $10,000 on April 2^nd. What are the first and last years of MACRS depreciation deductions using the mid-quarter convention?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 114

The basis in property acquired by inheritance is normally its fair market value at the date of the decedent's death.

When fully depreciating 7-year property, the final year of depreciation will be year:

What is a mixed-use asset? What adjustment must be made for depreciating a mixed-use asset?

The alternative depreciation system uses a straight-line allocation of an asset's cost to determine depreciation expense.

Explain how the basis of an asset is determined on acquisition.

MACRS depreciation for 5-year assets is based on:

What is the maximum amount that can be spent on depreciable personalty in the last quarter of 2018 to avoid the mid-quarter convention if $240,000 of equipment was purchased in the first three quarters?

Zachary purchased a new car on August 1, 2017 for $14,500. His records indicate that he uses the car 45 percent for business and 55 percent for personal use. What are his cost recovery deductions for 2017 and 2018?

Other Objective Questions Indicated by a P for personalty, R for realty, or B for both personalty and realty which are subject to the following provisions: -Listed property limitations

Chipper, a calendar-year corporation, purchased new machinery for $1,135,000 in February, 2018. In October, it purchased $2,105,000 of used machinery. What was Chipper's maximum cost recovery deduction for 2018?

If more than 40 percent of all personalty purchased during the year is placed in service during the last quarter of the year, the mid-quarter convention must be used.

What are the permissible tax treatments for research and experimentation expenditures?

The only acceptable convention for MACRS realty is

Other Objective Questions Indicated by a P for personalty, R for realty, or B for both personalty and realty which are subject to the following provisions: -Lease inclusion amounts

Moore Corporation (a calendar-year taxpayer), acquired a 5-year asset costing $10,000 on April 2^nd. What are the first and last years of MACRS depreciation deductions using the mid-quarter convention?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters

Exam 7: Property Acquisitions and Cost Recovery Deductions

The basis in property acquired by inheritance is normally its fair market value at the date of the decedent's death.

When fully depreciating 7-year property, the final year of depreciation will be year:

What is a mixed-use asset? What adjustment must be made for depreciating a mixed-use asset?

The alternative depreciation system uses a straight-line allocation of an asset's cost to determine depreciation expense.

Explain how the basis of an asset is determined on acquisition.

MACRS depreciation for 5-year assets is based on:

What is the maximum amount that can be spent on depreciable personalty in the last quarter of 2018 to avoid the mid-quarter convention if $240,000 of equipment was purchased in the first three quarters?

Zachary purchased a new car on August 1, 2017 for $14,500. His records indicate that he uses the car 45 percent for business and 55 percent for personal use. What are his cost recovery deductions for 2017 and 2018?

Other Objective Questions Indicated by a P for personalty, R for realty, or B for both personalty and realty which are subject to the following provisions: -Listed property limitations

Chipper, a calendar-year corporation, purchased new machinery for $1,135,000 in February, 2018. In October, it purchased $2,105,000 of used machinery. What was Chipper's maximum cost recovery deduction for 2018?

If more than 40 percent of all personalty purchased during the year is placed in service during the last quarter of the year, the mid-quarter convention must be used.

What are the permissible tax treatments for research and experimentation expenditures?

The only acceptable convention for MACRS realty is

Other Objective Questions Indicated by a P for personalty, R for realty, or B for both personalty and realty which are subject to the following provisions: -Lease inclusion amounts

Moore Corporation (a calendar-year taxpayer), acquired a 5-year asset costing $10,000 on April 2nd. What are the first and last years of MACRS depreciation deductions using the mid-quarter convention?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters

Moore Corporation (a calendar-year taxpayer), acquired a 5-year asset costing $10,000 on April 2^nd. What are the first and last years of MACRS depreciation deductions using the mid-quarter convention?