Exam 8: Depreciation, cost Recovery, amortization, and Depletion
Exam 1: An Introduction to Taxation and Understanding the Tax Law194 Questions
Exam 2: Working With the Tax Law86 Questions
Exam 3: Computing the Tax188 Questions
Exam 4: Gross Income: Concepts and Inclusions124 Questions
Exam 5: Gross Income: Exclusions113 Questions
Exam 6: Deductions and Losses: in General146 Questions
Exam 7: Deductions and Losses: Certain Business Expenses and Losses96 Questions
Exam 8: Depreciation, cost Recovery, amortization, and Depletion112 Questions
Exam 9: Deductions: Employee and Self-Employed-Related Expenses195 Questions
Exam 10: Deductions and Losses: Certain Itemized Deductions106 Questions
Exam 11: Investor Losses111 Questions
Exam 12: Tax Credits and Payments118 Questions
Exam 13: Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxabl269 Questions
Exam 14: Property Transactions: Capital Gains and Losses, section 1231 and Recapture Provisions136 Questions
Exam 15: Alternative Minimum Tax121 Questions
Exam 16: Accounting Periods and Methods86 Questions
Exam 17: Corporations: Introduction and Operating Rules108 Questions
Exam 18: Corporations: Organization and Capital Structure93 Questions
Exam 19: Corporations: Distributions Not in Complete Liquidation177 Questions
Exam 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations72 Questions
Exam 21: Partnerships194 Questions
Exam 22: S Corporations156 Questions
Exam 23: Exempt Entities136 Questions
Exam 24: Multistate Corporate Taxation173 Questions
Exam 25: Taxation of International Transactions173 Questions
Exam 26: Tax Practice and Ethics171 Questions
Exam 27: Family Tax Planning208 Questions
Exam 28: Income Taxation of Trusts and Estates166 Questions
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Tara purchased a machine for $40,000 to be used in her business.The cost recovery allowed and allowable for the three years the machine was used are computed as follows. Cost Recovery Allowed Cost Recovery Allowable Year 1 $16,000 $ 8,000 Year 2 9,600 12,800 Year 3 5,760 7,680 If Tara sells the machine after three years for $15,000,how much gain should she recognize?
(Multiple Choice)
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In 2014,Gail had a § 179 deduction carryover of $30,000.In 2015,she elected § 179 for an asset acquired at a cost of $115,000.Gail's § 179 business income limitation for 2015 is $140,000.Determine Gail's § 179 deduction for 2015.
(Multiple Choice)
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On June 1,2015,James places in service a new automobile that cost $40,000.The car is used 60% for business and 40% for personal use.(Assume this percentage is maintained for the life of the car. ) James does not take additional first-year depreciation (if available).Determine the cost recovery deduction for 2015.
(Multiple Choice)
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The cost recovery method for new farm equipment is 200% declining balance.
(True/False)
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On July 15,2015,Mavis paid $275,000 for improvements on a commercial building she owns.Determine the maximum total cost recovery from the improvements in 2015.
(Essay)
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Taxable income for purposes of § 179 limited expensing is computed by including the MACRS deduction.
(True/False)
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The basis of an asset on which $20,000 has been expensed under § 179 will be reduced by $20,000,even if $20,000 cannot be expensed in the current year because of the taxable income limitation.
(True/False)
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All personal property placed in service in 2015 and used in a trade or business qualifies for additional first-year depreciation.
(True/False)
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Orange Corporation begins business on April 2,2015.The corporation reports startup expenditures of $64,000 all incurred last year.Determine the total amount that Orange can elect to deduct in 2015.
(Multiple Choice)
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Sid bought a new $1,210,000 seven-year class asset on August 2,2015.On December 2,2015,he purchased $860,000 of used five-year class assets.If Sid elects § 179 and takes additional first-year depreciation,if available,what is the maximum cost recovery deduction for these purchases for 2015?
(Essay)
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Percentage depletion enables the taxpayer to recover more than the cost of an asset in the form of tax deductions.
(True/False)
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Cost depletion is determined by multiplying the depletion cost per unit by the number of units sold.
(True/False)
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Discuss the tax consequences of listed property being used for the production of income compared to being used in a trade or business.
(Essay)
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A used $35,000 automobile that is used 100% for business is placed in service in 2015.If the automobile fails the 50% business usage test in the second year,no cost recovery will be recaptured.
(True/False)
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On June 1,2015,Sam purchased used farm machinery for $150,000.Sam used the machinery in connection with his farming business.Sam does not elect to expense assets under § 179.Sam has,however,made an election to not have the uniform capitalization rules apply to the farming business.Determine the cost recovery deduction for 2015.
(Multiple Choice)
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For real property,the ADS convention is the mid-month convention.
(True/False)
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Audra acquires the following new five-year class property in 2015: Asset Acquisition Date Cost A January 10 $ 106,000 B July 5 70,000 C November 15 1,950,000 Total $ 2,126,000 Audra elects § 179 treatment for Asset C.Audra's taxable income from her business would not create a limitation for purposes of the § 179 deduction.Audra claims the full available additional first-year depreciation deduction.Determine her total cost recovery deduction (including the § 179 deduction) for the year.
(Essay)
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On April 5,2015,Orange Corporation purchased,and placed in service,seven-year class assets costing $540,000 and five-year class assets costing $140,000.Orange elects to expense the maximum amount under § 179.Orange does not take additional first-year depreciation (if available).Assume taxable income is not a limitation.Determine Orange Corporation's cost recovery with respect to the assets for 2015.
(Essay)
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