Question 1

The costs of qualified leasehold improvements qualify for additional first-year depreciation.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Pat purchased a used five-year class asset on March 15,2012,for $60,000.He did not elect § 179 expensing.Determine the cost recovery deduction for 2012 for earnings and profits purposes.

Accepted Answer

A)  $2,000. 
B)  $3,000. 
C)  $6,000. 
D)  $12,000. 
E)  None of the above. 
A)  $2,000. 
B)  $3,000. 
C)  $6,000. 
D)  $12,000. 
E)  None of the above.

Question 4

Any § 179 expense amount that is carried forward is subject to the business income limitation in the carryforward year.

Accepted Answer

A) True 
 B)False

Question 5

A purchased trademark is a § 197 intangible.

Accepted Answer

A) True 
 B)False

Question 6

George purchases used seven-year class property at a cost of $200,000 on April 20,2012.Determine George's cost recovery deduction for 2012 for alternative minimum tax purposes,assuming George does not elect § 179.

Accepted Answer

A)  $2,500. 
B)  $10,000. 
C)  $14,280. 
D)  $28,580. 
E)  None of the above. 
A)  $2,500. 
B)  $10,000. 
C)  $14,280. 
D)  $28,580. 
E)  None of the above.

Question 7

MACRS depreciation is used to compute earnings and profits.

Accepted Answer

A) True 
 B)False

Question 8

If a new car that is used predominantly in business is placed in service in 2012,the statutory dollar cost recovery limit under § 280F will depend on whether the taxpayer takes MACRS or straight-line depreciation.

Accepted Answer

A) True 
 B)False

Question 9

Under the MACRS straight-line election for personalty,the mid-quarter convention is applicable.

Accepted Answer

A) True 
 B)False

Question 10

On June 1,2012,Norm leases a taxi and places it in service.The lease payments are $1,000 per month.Assuming the dollar amount from the IRS table is $241,determine Norm's inclusion amount.

Accepted Answer

A)  $0. 
B)  $241. 
C)  $907. 
D)  $1,687. 
E)  None of the above. 
A)  $0. 
B)  $241. 
C)  $907. 
D)  $1,687. 
E)  None of the above.

Question 11

If 150% declining-balance is used,there is no straight-line switchover.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Cora purchased a hotel building on May 17,2012,for $3,000,000.Determine the cost recovery deduction for 2013.

Accepted Answer

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

Question 14

Norm purchases a new sports utility vehicle (SUV)on October 12,2012,for $50,000.The SUV has a gross vehicle weight of 6,200 lbs.It is used 100% of the time for business and it is the only business asset acquired by Norm during 2012.Compute the maximum deduction with respect to the SUV for 2012.Norm does take additional first-year depreciation.

Accepted Answer

The SUV is not classified as a

Question 15

Residential rental real estate includes property where 80% or more of the net rental revenues are from nontransient dwelling units.

Accepted Answer

A) True 
 B)False

Question 16

The concept of depreciation assumes that the asset has a determinable useful life.

Accepted Answer

A) True 
 B)False

Question 17

The only asset Bill purchased during 2012 was a new seven-year class asset.The asset,which was listed property,was acquired on June 17 at a cost of $50,000.The asset was used 40% for business,30% for the production of income,and the rest of the time for personal use.Bill always elects to expense the maximum amount under § 179 whenever it is applicable.The net income from the business before the § 179 deduction is $100,000.Determine Bill's maximum deduction with respect to the property for 2012.

Accepted Answer

A)  $1,428. 
B)  $2,499. 
C)  $26,749. 
D)  $33,375. 
E)  None of the above. 
A)  $1,428. 
B)  $2,499. 
C)  $26,749. 
D)  $33,375. 
E)  None of the above.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

James purchased a new business asset (three-year personalty)on July 23,2012,at a cost of $40,000.James takes additional first-year depreciation Determine the cost recovery deduction for 2012.

Accepted Answer

A)  $8,333. 
B)  $26,666. 
C)  $33,333. 
D)  $41,665. 
E)  None of the above. 
A)  $8,333. 
B)  $26,666. 
C)  $33,333. 
D)  $41,665. 
E)  None of the above.

Question 20

If a taxpayer uses regular MACRS for all property,an alternative minimum tax adjustment is made with respect to the depreciation on all property,regardless of the class life.

Accepted Answer

A) True 
 B)False

The costs of qualified leasehold improvements qualify for additional first-year depreciation.

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

Pat purchased a used five-year class asset on March 15,2012,for $60,000.He did not elect § 179 expensing.Determine the cost recovery deduction for 2012 for earnings and profits purposes.

Any § 179 expense amount that is carried forward is subject to the business income limitation in the carryforward year.

A purchased trademark is a § 197 intangible.

George purchases used seven-year class property at a cost of $200,000 on April 20,2012.Determine George's cost recovery deduction for 2012 for alternative minimum tax purposes,assuming George does not elect § 179.

MACRS depreciation is used to compute earnings and profits.

If a new car that is used predominantly in business is placed in service in 2012,the statutory dollar cost recovery limit under § 280F will depend on whether the taxpayer takes MACRS or straight-line depreciation.

Under the MACRS straight-line election for personalty,the mid-quarter convention is applicable.

On June 1,2012,Norm leases a taxi and places it in service.The lease payments are $1,000 per month.Assuming the dollar amount from the IRS table is $241,determine Norm's inclusion amount.

If 150% declining-balance is used,there is no straight-line switchover.

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

Cora purchased a hotel building on May 17,2012,for $3,000,000.Determine the cost recovery deduction for 2013.

Residential rental real estate includes property where 80% or more of the net rental revenues are from nontransient dwelling units.

The concept of depreciation assumes that the asset has a determinable useful life.

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

James purchased a new business asset (three-year personalty)on July 23,2012,at a cost of $40,000.James takes additional first-year depreciation Determine the cost recovery deduction for 2012.

If a taxpayer uses regular MACRS for all property,an alternative minimum tax adjustment is made with respect to the depreciation on all property,regardless of the class life.

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: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

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

The costs of qualified leasehold improvements qualify for additional first-year depreciation.

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

Pat purchased a used five-year class asset on March 15,2012,for $60,000.He did not elect § 179 expensing.Determine the cost recovery deduction for 2012 for earnings and profits purposes.

Any § 179 expense amount that is carried forward is subject to the business income limitation in the carryforward year.

A purchased trademark is a § 197 intangible.

George purchases used seven-year class property at a cost of $200,000 on April 20,2012.Determine George's cost recovery deduction for 2012 for alternative minimum tax purposes,assuming George does not elect § 179.

MACRS depreciation is used to compute earnings and profits.

If a new car that is used predominantly in business is placed in service in 2012,the statutory dollar cost recovery limit under § 280F will depend on whether the taxpayer takes MACRS or straight-line depreciation.

Under the MACRS straight-line election for personalty,the mid-quarter convention is applicable.

On June 1,2012,Norm leases a taxi and places it in service.The lease payments are $1,000 per month.Assuming the dollar amount from the IRS table is $241,determine Norm's inclusion amount.

If 150% declining-balance is used,there is no straight-line switchover.

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

Cora purchased a hotel building on May 17,2012,for $3,000,000.Determine the cost recovery deduction for 2013.

Residential rental real estate includes property where 80% or more of the net rental revenues are from nontransient dwelling units.

The concept of depreciation assumes that the asset has a determinable useful life.

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

James purchased a new business asset (three-year personalty)on July 23,2012,at a cost of $40,000.James takes additional first-year depreciation Determine the cost recovery deduction for 2012.

If a taxpayer uses regular MACRS for all property,an alternative minimum tax adjustment is made with respect to the depreciation on all property,regardless of the class life.

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: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters