FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

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

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

True/False

Review LaterAdd Note

Review Later

MACRS depreciation is used to compute earnings and profits.

A) True
B) False

Correct Answer

verified

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

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?

Correct Answer

verified

§ 179 expense $25,00...

View Answer

Show Answer

Question 33

Essay

Review LaterAdd Note

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.

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

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

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.

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.

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

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

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

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

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?

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.

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.

Motel buildings have a cost recovery period of 27.5 years.

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.

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.

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 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.