Exam 7: Property Acquisitions and Cost Recovery Deductions

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: -The adjusted basis of an asset is:

13 Bonus depreciation and Section 179 expensing are never taken on the same asset.

On November 7, 2018, Wilson Corporation acquires 7-year property for $25,000. This is the only property acquired this year and neither Section 179 expensing nor bonus depreciation were claimed. What is Wilson's total depreciation deduction for 2018?

During the year, Garbin Corporation (a calendar-year corporation that manufactures furniture) purchased the following assets: In computing depreciation of these assets, which of the following averaging conventions will be used?

Software purchased in 2018 is eligible for

A donee's basis in a gift is always equal to the donor's basis.

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: -Reduction for personal use

Allen Corporation acquired 5-year property costing $150,000 on September 10, 2018. This is the only property acquired this year and Allen elects to expense the maximum amount under Section 179. Allen's income before deducting depreciation is $15,000. What is the maximum amount that Allen can deduct in 2018 for Section 179 expensing?

What is the difference in the basis of an asset acquired by gift and one acquired by inheritance?

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?

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

All of the following are acceptable conventions for MACRS property except:

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. To maximize its total cost recovery deduction, what was Sanjuro Corporation's cost recovery deduction for the computer equipment for 2018?

What is the difference between cost and percentage depletion?