Question 1

MACRS means

Accepted Answer

A)  Modified asset cost recovery system 
B)  Mid-year accelerated cost recovery system 
C)  Modified accelerated cost recovery system 
D)  Modified accelerated conventional recovery system 
A)  Modified asset cost recovery system 
B)  Mid-year accelerated cost recovery system 
C)  Modified accelerated cost recovery system 
D)  Modified accelerated conventional recovery system

Question 2

What are listed properties?

Accepted Answer

Listed properties are those properties t

Question 3

Morgan Corporation, a calendar-year corporation, purchased a $2,800,000 factory building in February, $950,000 of new machinery in April, $80,000 of new office furniture in August, $900,000 of used machinery in October, and $150,000 of additional new office furniture in December 2018.
What is the corporation's first year maximum cost recovery deduction assuming the corporation expects at least $2,500,000 of income before depreciation deductions in 2018?

Accepted Answer

For 2018 the total cost recovery deducti

Question 4

Wolfgang, a calendar-year taxpayer, purchased residential rental realty in April of year 1 for $150,000 ($50,000 of which was for the land).

Accepted Answer

A)  What is Wolfgang's MACRS depreciation deduction in years 1 and 2? 
B)  What is his depreciation deduction in year 20 if he disposes of the asset in August of that year? 
C)  How would your answers change to (a) and (b) if the property is nonresidential realty? 
A)  What is Wolfgang's MACRS depreciation deduction in years 1 and 2? 
B)  What is his depreciation deduction in year 20 if he disposes of the asset in August of that year? 
C)  How would your answers change to (a) and (b) if the property is nonresidential realty?

Question 5

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:
-Half-year convention

Accepted Answer

The answer of Other Objective Questions
Indicated by a P for...

Question 6

When fully depreciating 5-year property, the final year of depreciation will be year:

Accepted Answer

A)  6 
B)  5 
C)  4 
D)  3 
A)  6 
B)  5 
C)  4 
D)  3

Question 7

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

Accepted Answer

A)  5 
B)  6 
C)  7 
D)  8 
A)  5 
B)  6 
C)  7 
D)  8

Question 8

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. If YumYum Corporation made all elections available to maximize its overall depreciation deduction for 2018, what would its maximum cost recovery deduction be for 2018?

Accepted Answer

A)  $190,000 
B)  $225,281 
C)  $229,601 
D)  $248,441 
A)  $190,000 
B)  $225,281 
C)  $229,601 
D)  $248,441

Question 9

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

Accepted Answer

A mixed-use asset is one that is used fo

Question 10

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:
-Jack did not depreciate one of his machines that cost $40,000 because he had net operating losses for the last two years. Which of the following statements is true?

Accepted Answer

A)  Jack's basis in the asset is $40,000 this year. 
B)  Jack can deduct three year's depreciation in the current year. 
C)  Jack must file amended returns to claim the depreciation for prior years. 
D)  If Jack sells the machine for $20,000 this year, he has a $20,000 loss. 
A)  Jack's basis in the asset is $40,000 this year. 
B)  Jack can deduct three year's depreciation in the current year. 
C)  Jack must file amended returns to claim the depreciation for prior years. 
D)  If Jack sells the machine for $20,000 this year, he has a $20,000 loss.

Question 11

Jeremy purchased an asset for $12,000 at the beginning of the year. No Section 179 expensing or bonus depreciation is claimed for this property. Assuming the asset is depreciated over three years on a straight-line basis, no averaging conventions apply, Jeremy's tax rate is 35 percent, and he uses a 6 percent discount rate, what is the after-tax cost of the asset?

Accepted Answer

@#IMG-DLM& The after-tax cost

Question 12

Coralbay, a calendar-year corporation, purchased used office furniture for $240,000 and new machines for $1,880,000 in July 2018. What is Coralbay's maximum cost recovery deduction for 2018?

Accepted Answer

A)  $240,000 
B)  $510,000 
C)  $1,000,000 
D)  $2,120,000 
A)  $240,000 
B)  $510,000 
C)  $1,000,000 
D)  $2,120,000

Question 13

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 maximum cost recovery deduction for the warehouse for 2019?

Accepted Answer

A)  $62,818 
B)  $55,052 
C)  $49,809 
D)  $44,566 
A)  $62,818 
B)  $55,052 
C)  $49,809 
D)  $44,566

Question 14

What is the purpose of the lease inclusion amount for automobiles?

Accepted Answer

To prevent taxpayers from circumventing

Question 15

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

Accepted Answer

A)  $3,500 and $138 
B)  $2,500 and $426 
C)  $1,500 and $706 
D)  $500 and $958 
A)  $3,500 and $138 
B)  $2,500 and $426 
C)  $1,500 and $706 
D)  $500 and $958

Question 16

The first and last years of MACRS depreciation deductions for a 7-year asset costing $20,000 using the half-year convention are:

Accepted Answer

A)  $4,000 and $1,152 
B)  $2,858 and $892 
C)  $2,000 and $576 
D)  $1,428 and $1,428 
A)  $4,000 and $1,152 
B)  $2,858 and $892 
C)  $2,000 and $576 
D)  $1,428 and $1,428

Question 17

Wendell purchased a computer system for $6,000 on June 1, 2016. He kept records of his computer usage and found out he used the computer 45 percent of the time for his business, 20 percent for tracking his extensive investment portfolio and making trades, and the remaining time was for personal use in both years.
a. Determine Wendell's depreciation deductions in 2016 and 2017.
b. In 2018, Wendell's usage remained the same but he decided to dispose of the computer on November 1. Determine his 2018 depreciation deduction and his gain or loss on the disposition if he received $2,500 for the system.

Accepted Answer

Business use is less than 50 percent; th

Question 18

The only acceptable convention for MACRS realty is

Accepted Answer

A)  Mid-week 
B)  Mid-month 
C)  Mid-quarter 
D)  Half-year 
A)  Mid-week 
B)  Mid-month 
C)  Mid-quarter 
D)  Half-year

Question 19

In a basket purchase of a group of assets, the purchaser and the seller can agree to the value of the separate assets.

Accepted Answer

A) True 
 B)False

Question 20

Depletion is the term used for the cost allocation of wasting assets.

Accepted Answer

A) True 
 B)False

MACRS means

What are listed properties?

Wolfgang, a calendar-year taxpayer, purchased residential rental realty in April of year 1 for $150,000 ($50,000 of which was for the land).

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: -Half-year convention

When fully depreciating 5-year property, the final year of depreciation will be year:

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?

Coralbay, a calendar-year corporation, purchased used office furniture for $240,000 and new machines for $1,880,000 in July 2018. What is Coralbay's maximum cost recovery deduction for 2018?

What is the purpose of the lease inclusion amount for automobiles?

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

The first and last years of MACRS depreciation deductions for a 7-year asset costing $20,000 using the half-year convention are:

The only acceptable convention for MACRS realty is

In a basket purchase of a group of assets, the purchaser and the seller can agree to the value of the separate assets.

Depletion is the term used for the cost allocation of wasting assets.

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

MACRS means

What are listed properties?

Wolfgang, a calendar-year taxpayer, purchased residential rental realty in April of year 1 for $150,000 ($50,000 of which was for the land).

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: -Half-year convention

When fully depreciating 5-year property, the final year of depreciation will be year:

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?

Coralbay, a calendar-year corporation, purchased used office furniture for $240,000 and new machines for $1,880,000 in July 2018. What is Coralbay's maximum cost recovery deduction for 2018?

What is the purpose of the lease inclusion amount for automobiles?

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

The first and last years of MACRS depreciation deductions for a 7-year asset costing $20,000 using the half-year convention are:

The only acceptable convention for MACRS realty is

In a basket purchase of a group of assets, the purchaser and the seller can agree to the value of the separate assets.

Depletion is the term used for the cost allocation of wasting assets.

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

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