Exam 10: Cost Recovery on Property: Depreciation, depletion, and Amortization

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Watson Company purchases used equipment (5-year MACRS property)for $550,000 on July 8,2016.What is Watson' maximum allowable cost recovery deduction for 2016 on the equipment if this is the only purchase of equipment for 2016?

(Multiple Choice)

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Question 101

Greenville Floral places a new tractor (7-year MACRS)into service on January 8,2016.They pay $28,000 for the tractor.This is the only business asset placed into service during this year.Greenville Floral wants to minimize the amount of depreciation deductible in 2016.What is Greenville Floral's cost recovery for 2016?

(Multiple Choice)

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Question 102

What is the MACRS recovery period for an office desk?

(Multiple Choice)

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Question 103

The mid-quarter convention I.never applies to real estate. II.is required when more than 30% of the depreciable basis of certain property is placed into service during the last 3 months of the tax year.

(Multiple Choice)

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Question 104

The earlier the depreciation deduction can be taken,the greater the present value of the tax savings will be to the taxpayer.

(True/False)

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Question 105

Cruz Copy Shop purchases a new copy machine in July 2016 for $30,000.No other depreciable assets are placed in service in 2016.Since Cruz Copy Shop expects to be in a much higher tax bracket in future years,it desires to minimize its current cost recovery amount to the fullest extent possible.What is the amount of Cruz Copy Shop's MACRS straight-line depreciation for 2016?

(Multiple Choice)

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Question 106

Carolyn purchases a new delivery truck (5-year MACRS property)costing $508,000 for use in her floral business on January 5,2016.If Carolyn's taxable income from the floral business before any special elections is $8,000 for 2016,what is her maximum allowable cost recovery on the delivery truck in 2016?

(Multiple Choice)

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Question 107

Match each statement with the correct term below. -Depletion

(Multiple Choice)

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Question 108

Which of the following would be allowed a depreciation deduction? I.Inventory. II.Land acquired as an investment. III.Residence used as rental property. IV.Airplane used by company controller to attend accounting conference.

(Multiple Choice)

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Question 109

The mid-year convention is used for personal property only.

(True/False)

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Question 110

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Watson Company purchases used equipment (5-year MACRS property)for $550,000 on July 8,2016.What is Watson' maximum allowable cost recovery deduction for 2016 on the equipment if this is the only purchase of equipment for 2016?

What is the MACRS recovery period for an office desk?

The mid-quarter convention I.never applies to real estate. II.is required when more than 30% of the depreciable basis of certain property is placed into service during the last 3 months of the tax year.

The earlier the depreciation deduction can be taken,the greater the present value of the tax savings will be to the taxpayer.

Match each statement with the correct term below. -Depletion

Which of the following would be allowed a depreciation deduction? I.Inventory. II.Land acquired as an investment. III.Residence used as rental property. IV.Airplane used by company controller to attend accounting conference.

The mid-year convention is used for personal property only.

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

Exam 10: Cost Recovery on Property: Depreciation, depletion, and Amortization

Watson Company purchases used equipment (5-year MACRS property)for $550,000 on July 8,2016.What is Watson' maximum allowable cost recovery deduction for 2016 on the equipment if this is the only purchase of equipment for 2016?

What is the MACRS recovery period for an office desk?

The mid-quarter convention I.never applies to real estate. II.is required when more than 30% of the depreciable basis of certain property is placed into service during the last 3 months of the tax year. ​

The earlier the depreciation deduction can be taken,the greater the present value of the tax savings will be to the taxpayer.

Match each statement with the correct term below. -Depletion

Which of the following would be allowed a depreciation deduction? I.Inventory. II.Land acquired as an investment. III.Residence used as rental property. IV.Airplane used by company controller to attend accounting conference. ​

The mid-year convention is used for personal property only.

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

The mid-quarter convention I.never applies to real estate. II.is required when more than 30% of the depreciable basis of certain property is placed into service during the last 3 months of the tax year.

Which of the following would be allowed a depreciation deduction? I.Inventory. II.Land acquired as an investment. III.Residence used as rental property. IV.Airplane used by company controller to attend accounting conference.