Question 1

An election to use straight-line under ADS is made on an asset-by-asset basis for property other than eligible real estate.

Accepted Answer

A) True 
 B)False

Question 2

On February 21,2014,Joe purchased new farm equipment for $60,000.Joe has made an election to not have the uniform capitalization rules apply to his farming business.He does not take additional first-year depreciation (if available).If Joe elects § 179,what is the maximum write­off for this purchase for 2014?

Accepted Answer

§ 179 expense $25,00

Question 3

Antiques may be eligible for cost recovery if they are used in a trade or business.

Accepted Answer

A) True 
 B)False

Question 4

For real property,the ADS convention is the mid-month convention.

Accepted Answer

A) True 
 B)False

Question 5

Under MACRS,if the mid-quarter convention is applicable,all property sold is treated as being sold at the mid-point of the quarter in which it is placed in service.

Accepted Answer

A) True 
 B)False

Question 6

All listed property is subject to the substantiation requirements of § 274.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the reason for the inclusion amount with respect to leased automobiles.

Accepted Answer

The purpose of the inclusion a

Question 8

Audra acquires the following new five-year class property in 2014:
   Audra's taxable income from her business would not create a limitation for purposes of the § 179 deduction.Audra does not take additional first-year depreciation (if available).Determine her total cost recovery deduction (including the § 179 deduction)for the year.

Accepted Answer

$300,000/$476,000 = 63%.Theref

Question 9

On July 15,2014,Mavis paid $275,000 for leasehold improvements on a commercial building she was leasing.Determine the maximum total cost recovery from the improvements in 2014.

Accepted Answer

Regular MACRS [39-ye

Question 10

Property which is classified as personalty may be depreciated.

Accepted Answer

A) True 
 B)False

Question 11

Alice purchased office furniture on September 20,2013,for $100,000.On October 10,2013,she purchased business computers for $80,000.Alice placed all of the assets in service on January 15,2014.Alice did not elect to expense any of the assets under § 179,did not elect straight­line cost recovery,and did not take additional first­year depreciation (if available).Determine the cost recovery deduction for the business assets for 2014.

Accepted Answer

A) $6,426 
B) $14,710 
C) $25,722 
D) $30,290 
E) None of these 
A) $6,426 
B) $14,710 
C) $25,722 
D) $30,290 
E) None of these

Question 12

Sid bought a new $180,000 seven-year class asset on August 2,2014.On December 2,2014,he purchased $24,000 of used five­year class assets.Sid does not take additional first­year depreciation if available.If Sid elects § 179,what is the maximum write-off for these purchases for 2014?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Using § 179 on the used 7­ye

Question 13

Cora purchased a hotel building on May 17,2014,for $3,000,000.Determine the cost recovery deduction for 2015.

Accepted Answer

A) $48,150 
B) $59,520 
C) $69,000 
D) $76,920 
E) None of these 
A) $48,150 
B) $59,520 
C) $69,000 
D) $76,920 
E) None of these

Question 14

Motel buildings have a cost recovery period of 27.5 years.

Accepted Answer

A) True 
 B)False

Question 15

Rod paid $1,950,000 for a new warehouse on April 14,2014.He sold the warehouse on September 29,2019.Determine the cost recovery deduction for 2014 and 2019.

Accepted Answer

2014: $1,950,000 × .

Question 16

Howard's business is raising and harvesting peaches.On March 10,2014,Howard purchased 10,000 new peach trees at a cost of $60,000.Howard does not make an election to expense assets under § 179 and does not take additional first-year depreciation (if available).Determine the cost recovery deduction for 2014.

Accepted Answer

A) $1,532 
B) $3,000 
C) $12,000 
D) $31,500 
E) None of these 
A) $1,532 
B) $3,000 
C) $12,000 
D) $31,500 
E) None of these

Question 17

MACRS depreciation is used to compute earnings and profits.

Accepted Answer

A) True 
 B)False

Question 18

On June 1,2014,Irene places in service a new automobile that cost $21,000.The car is used 70% for business and 30% for personal use.(Assume this percentage is maintained for the life of the car. )She does not take additional first-year depreciation (if available).Determine the cost recovery deduction for 2015.

Accepted Answer

A) $3,160 
B) $3,290 
C) $3,570 
D) $6,720 
E) None of these 
A) $3,160 
B) $3,290 
C) $3,570 
D) $6,720 
E) None of these

Question 19

The § 179 deduction can exceed $25,000 in 2014 if the taxpayer had a § 179 amount which exceeded the taxable income limitation in the prior year.

Accepted Answer

A) True 
 B)False

Question 20

On May 15,2014,Brent purchased new farm equipment for $200,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does not take additional first­year depreciation (if available).Determine the cost recovery deduction for 2014.

Accepted Answer

A) $12,852 
B) $21,420 
C) $30,000 
D) $36,000 
E) None of these 
A) $12,852 
B) $21,420 
C) $30,000 
D) $36,000 
E) None of these

An election to use straight-line under ADS is made on an asset-by-asset basis for property other than eligible real estate.

Antiques may be eligible for cost recovery if they are used in a trade or business.

For real property,the ADS convention is the mid-month convention.

Under MACRS,if the mid-quarter convention is applicable,all property sold is treated as being sold at the mid-point of the quarter in which it is placed in service.

All listed property is subject to the substantiation requirements of § 274.

Discuss the reason for the inclusion amount with respect to leased automobiles.

On July 15,2014,Mavis paid $275,000 for leasehold improvements on a commercial building she was leasing.Determine the maximum total cost recovery from the improvements in 2014.

Property which is classified as personalty may be depreciated.

Sid bought a new $180,000 seven-year class asset on August 2,2014.On December 2,2014,he purchased $24,000 of used fiveyear class assets.Sid does not take additional firstyear depreciation if available.If Sid elects § 179,what is the maximum write-off for these purchases for 2014?

Cora purchased a hotel building on May 17,2014,for $3,000,000.Determine the cost recovery deduction for 2015.

Motel buildings have a cost recovery period of 27.5 years.

Rod paid $1,950,000 for a new warehouse on April 14,2014.He sold the warehouse on September 29,2019.Determine the cost recovery deduction for 2014 and 2019.

MACRS depreciation is used to compute earnings and profits.

The § 179 deduction can exceed $25,000 in 2014 if the taxpayer had a § 179 amount which exceeded the taxable income limitation in the prior year.

On May 15,2014,Brent purchased new farm equipment for $200,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does not take additional firstyear depreciation (if available).Determine the cost recovery deduction for 2014.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination;an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 8: Depreciation, cost Recovery, amortization, and Depletion

An election to use straight-line under ADS is made on an asset-by-asset basis for property other than eligible real estate.

Antiques may be eligible for cost recovery if they are used in a trade or business.

For real property,the ADS convention is the mid-month convention.

Under MACRS,if the mid-quarter convention is applicable,all property sold is treated as being sold at the mid-point of the quarter in which it is placed in service.

All listed property is subject to the substantiation requirements of § 274.

Discuss the reason for the inclusion amount with respect to leased automobiles.

On July 15,2014,Mavis paid $275,000 for leasehold improvements on a commercial building she was leasing.Determine the maximum total cost recovery from the improvements in 2014.

Property which is classified as personalty may be depreciated.

Sid bought a new $180,000 seven-year class asset on August 2,2014.On December 2,2014,he purchased $24,000 of used five­year class assets.Sid does not take additional first­year depreciation if available.If Sid elects § 179,what is the maximum write-off for these purchases for 2014?

Cora purchased a hotel building on May 17,2014,for $3,000,000.Determine the cost recovery deduction for 2015.

Motel buildings have a cost recovery period of 27.5 years.

Rod paid $1,950,000 for a new warehouse on April 14,2014.He sold the warehouse on September 29,2019.Determine the cost recovery deduction for 2014 and 2019.

MACRS depreciation is used to compute earnings and profits.

The § 179 deduction can exceed $25,000 in 2014 if the taxpayer had a § 179 amount which exceeded the taxable income limitation in the prior year.

On May 15,2014,Brent purchased new farm equipment for $200,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does not take additional first­year depreciation (if available).Determine the cost recovery deduction for 2014.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination;an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Sid bought a new $180,000 seven-year class asset on August 2,2014.On December 2,2014,he purchased $24,000 of used fiveyear class assets.Sid does not take additional firstyear depreciation if available.If Sid elects § 179,what is the maximum write-off for these purchases for 2014?

On May 15,2014,Brent purchased new farm equipment for $200,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does not take additional firstyear depreciation (if available).Determine the cost recovery deduction for 2014.