Question 1

Which of the allowable methods allows the most accelerated depreciation?

Accepted Answer

A) 150 percent declining balance 
B) 200 percent declining balance 
C) Straight line 
D) Sum of the years digits 
E) None of these allow accelerated depreciation 
A) 150 percent declining balance 
B) 200 percent declining balance 
C) Straight line 
D) Sum of the years digits 
E) None of these allow accelerated depreciation

Question 2

Putin Corporation began business on September 23rd of the current year. It incurred $40,000 of start-up costs and $60,000 of organizational expenditures. How much total amortization may be deducted in the first year, rounded to the nearest whole number?

Accepted Answer

$7,111
Explanation: Total amortization i

Question 3

Clay LLC placed in service machinery and equipment (7-year property) with a basis of $2,450,000 on June 6, 2016. Assume that Clay has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (ignoring any possible bonus expensing), rounded to a whole number. (Assume that the 2015 §179 limits are identical to 2016.)

Accepted Answer

A) $350,105 
B) $392,960 
C) $778,070 
D) $864,395 
E) None of these 
A) $350,105 
B) $392,960 
C) $778,070 
D) $864,395 
E) None of these

Question 4

Depreciation is currently computed under the Modified Accelerated Cost Recovery System (MACRS).

Accepted Answer

A) True 
 B)False

Question 5

Potomac LLC purchased an automobile for $30,000 on August 5, 2016. What is Potomac's depreciation expense for 2016? (ignore any possible bonus depreciation)

Accepted Answer

A) $3,160 
B) $4,287 
C) $6,000 
D) $30,000 
E) None of these 
A) $3,160 
B) $4,287 
C) $6,000 
D) $30,000 
E) None of these

Question 6

If the business use percentage for listed property falls below 50 percent, the only adjustment is all future depreciation must be calculated under the straight-line method.

Accepted Answer

A) True 
 B)False

Question 7

Paulsen incurred $55,000 of research and experimental expenses and began amortizing them over 60 months during June of year 1. During May of year 3, Paulsen received a patent based upon the research being amortized. $36,000 of legal expenses for the patent was incurred. The patent is expected to have a remaining useful life of 17 years.
1) What is the basis of the patent, rounding amortization for each year to the nearest whole number?
2) What is the amortization expense with respect to the patent during the year it was issued, rounded to the nearest whole number?

Accepted Answer

1) $69,000
Explanati

Question 8

Which of the following depreciation conventions are not used under MACRS?

Accepted Answer

A) Full-month 
B) Half-year 
C) Mid-month 
D) Mid-quarter 
E) All of these are used under MACRS 
A) Full-month 
B) Half-year 
C) Mid-month 
D) Mid-quarter 
E) All of these are used under MACRS

Question 9

Wheeler LLC purchased two assets during the current year (a full 12-month tax year). Wheeler placed in service computer equipment (5-year property) on November 16 with a basis of $15,000 and furniture (7-year property) on April 20 with a basis of $11,000. Calculate the maximum depreciation expense, rounding to a whole number (ignoring §179 and bonus depreciation):

Accepted Answer

A) $1,285 
B) $2,714 
C) $4,572 
D) $5,200 
E) None of these 
A) $1,285 
B) $2,714 
C) $4,572 
D) $5,200 
E) None of these

Question 10

Arlington LLC purchased an automobile for $40,000 on July 5, 2016. What is Arlington's depreciation expense for 2016 if its business use percentage is 75 percent? (ignore any possible bonus depreciation)

Accepted Answer

A) $2,370 
B) $3,160 
C) $6,000 
D) $8,000 
E) None of these 
A) $2,370 
B) $3,160 
C) $6,000 
D) $8,000 
E) None of these

Question 11

Like financial accounting, most acquired business property must be capitalized for tax purposes.

Accepted Answer

A) True 
 B)False

Question 12

Crouch LLC placed in service on May 19, 2016 machinery and equipment (7-year property) with a basis of $2,200,000. Assume that Crouch has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing). (Assume that the 2015 §179 limits are identical to 2016.)

Accepted Answer

A) $314,380. 
B) $440,000. 
C) $571,510. 
D) $742,930. 
E) None of these. 
A) $314,380. 
B) $440,000. 
C) $571,510. 
D) $742,930. 
E) None of these.

Question 13

Lax, LLC purchased only one asset during the current year (a full 12-month tax year). Lax placed in service computer equipment (5-year property) on August 26 with a basis of $20,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation):

Accepted Answer

A) $2,000 
B) $2,858 
C) $3,000 
D) $4,000 
E) None of these 
A) $2,000 
B) $2,858 
C) $3,000 
D) $4,000 
E) None of these

Question 14

Taxpayers may always expense a portion of start-up costs and organizational expenditures.

Accepted Answer

A) True 
 B)False

Question 15

The alternative depreciation system requires both a slower method of recovery and longer recovery periods.

Accepted Answer

A) True 
 B)False

Question 16

The manner in which a business amortizes a patent or copyright is the same whether the business directly purchases the patent or copyright or whether it self-creates the intangible.

Accepted Answer

A) True 
 B)False

Question 17

Littman LLC placed in service on July 29, 2016 machinery and equipment (7-year property) with a basis of $600,000. Littman's income for the current year before any depreciation expense was $100,000. Which of the following statements is true to maximize Littman's total depreciation expense for 2016? (Assume that the 2015 §179 limits are identical to 2016.)

Accepted Answer

A) Littman should take §179 expense equal to the maximum $500,000. 
B) Littman should take no §179 expense. 
C) Littman's §179 expense will be greater than $100,000. 
D) Littman's §179 expense will be less than $100,000. 
E) None of these. 
A) Littman should take §179 expense equal to the maximum $500,000. 
B) Littman should take no §179 expense. 
C) Littman's §179 expense will be greater than $100,000. 
D) Littman's §179 expense will be less than $100,000. 
E) None of these.

Question 18

Sairra, LLC purchased only one asset during the current year (a full 12-month tax year). Sairra placed in service furniture (7-year property) on April 16 with a basis of $25,000. Calculate the maximum depreciation expense for the current year, rounding to a whole number (ignoring §179 and bonus depreciation):

Accepted Answer

A) $1,786 
B) $3,573 
C) $4,463 
D) $5,000 
E) None of these 
A) $1,786 
B) $3,573 
C) $4,463 
D) $5,000 
E) None of these

Question 19

All assets subject to amortization have the same recovery period.

Accepted Answer

A) True 
 B)False

Question 20

The method for tax amortization is always the straight-line method.

Accepted Answer

A) True 
 B)False

Which of the allowable methods allows the most accelerated depreciation?

Putin Corporation began business on September 23^rd of the current year. It incurred $40,000 of start-up costs and $60,000 of organizational expenditures. How much total amortization may be deducted in the first year, rounded to the nearest whole number?

Depreciation is currently computed under the Modified Accelerated Cost Recovery System (MACRS).

Potomac LLC purchased an automobile for $30,000 on August 5, 2016. What is Potomac's depreciation expense for 2016? (ignore any possible bonus depreciation)

If the business use percentage for listed property falls below 50 percent, the only adjustment is all future depreciation must be calculated under the straight-line method.

Which of the following depreciation conventions are not used under MACRS?

Arlington LLC purchased an automobile for $40,000 on July 5, 2016. What is Arlington's depreciation expense for 2016 if its business use percentage is 75 percent? (ignore any possible bonus depreciation)

Like financial accounting, most acquired business property must be capitalized for tax purposes.

Lax, LLC purchased only one asset during the current year (a full 12-month tax year). Lax placed in service computer equipment (5-year property) on August 26 with a basis of $20,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation):

Taxpayers may always expense a portion of start-up costs and organizational expenditures.

The alternative depreciation system requires both a slower method of recovery and longer recovery periods.

The manner in which a business amortizes a patent or copyright is the same whether the business directly purchases the patent or copyright or whether it self-creates the intangible.

All assets subject to amortization have the same recovery period.

The method for tax amortization is always the straight-line method.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 10: Property Acquisition and Cost Recovery

Which of the allowable methods allows the most accelerated depreciation?

Putin Corporation began business on September 23rd of the current year. It incurred $40,000 of start-up costs and $60,000 of organizational expenditures. How much total amortization may be deducted in the first year, rounded to the nearest whole number?

Depreciation is currently computed under the Modified Accelerated Cost Recovery System (MACRS).

Potomac LLC purchased an automobile for $30,000 on August 5, 2016. What is Potomac's depreciation expense for 2016? (ignore any possible bonus depreciation)

If the business use percentage for listed property falls below 50 percent, the only adjustment is all future depreciation must be calculated under the straight-line method.

Which of the following depreciation conventions are not used under MACRS?

Arlington LLC purchased an automobile for $40,000 on July 5, 2016. What is Arlington's depreciation expense for 2016 if its business use percentage is 75 percent? (ignore any possible bonus depreciation)

Like financial accounting, most acquired business property must be capitalized for tax purposes.

Lax, LLC purchased only one asset during the current year (a full 12-month tax year). Lax placed in service computer equipment (5-year property) on August 26 with a basis of $20,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation):

Taxpayers may always expense a portion of start-up costs and organizational expenditures.

The alternative depreciation system requires both a slower method of recovery and longer recovery periods.

The manner in which a business amortizes a patent or copyright is the same whether the business directly purchases the patent or copyright or whether it self-creates the intangible.

All assets subject to amortization have the same recovery period.

The method for tax amortization is always the straight-line method.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Putin Corporation began business on September 23^rd of the current year. It incurred $40,000 of start-up costs and $60,000 of organizational expenditures. How much total amortization may be deducted in the first year, rounded to the nearest whole number?