Question 1

The cost recovery method for all personal property under MACRS is 200% declining balance.

Accepted Answer

A) True 
 B)False

Question 2

Intangible drilling costs may be expensed rather than capitalized and written off through depletion.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Cost depletion is determined by multiplying the depletion cost per unit by the number of units produced.

Accepted Answer

A) True 
 B)False

Question 5

On November 1,2010,Red Corporation purchased an existing business.With respect to the acquired assets of the business,Red allocated $500,000 of the purchase price to a patent.The patent will expire in seven years.Determine the total amount that Red may amortize for 2010 for the patent.

Accepted Answer

A) $0. 
B) $5,556. 
C) $33,333. 
D) $500,000. 
E) None of the above. 
A) $0. 
B) $5,556. 
C) $33,333. 
D) $500,000. 
E) None of the above.

Question 6

Mary purchased a new five-year class asset on March 7,2010.The asset was listed property (not an automobile).It was used 60% for business and the rest of the time for personal use.The asset cost $600,000.Mary made the § 179 election.The income from the business before the § 179 deduction was $300,000.If Congress reenacts additional first-year depreciation for 2010,Mary does elect not to take additional first-year depreciation.Determine the total deductions with respect to the asset for 2010.

Accepted Answer

A) $72,000. 
B) $250,000. 
C) $272,000. 
D) $300,000. 
E) None of the above. 
A) $72,000. 
B) $250,000. 
C) $272,000. 
D) $300,000. 
E) None of the above.

Question 7

The § 179 limit for a sports utility vehicle with a GVW of 7,000 pounds used in a trade or business is $25,000.

Accepted Answer

A) True 
 B)False

Question 8

On January 15,2010,Vern purchased the rights to a mineral interest for $3,500,000.At that time it was estimated that the recoverable units would be 500,000.During the year,40,000 units were mined and 25,000 units were sold for $800,000.Vern incurred expenses during 2010 of $500,000.The percentage depletion rate is 22%.Determine Vern's depletion deduction for 2010.

Accepted Answer

A) $150,000. 
B) $175,000. 
C) $176,000. 
D) $200,000. 
E) $250,000. 
A) $150,000. 
B) $175,000. 
C) $176,000. 
D) $200,000. 
E) $250,000.

The cost recovery method for all personal property under MACRS is 200% declining balance.

Intangible drilling costs may be expensed rather than capitalized and written off through depletion.

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

Cost depletion is determined by multiplying the depletion cost per unit by the number of units produced.

On November 1,2010,Red Corporation purchased an existing business.With respect to the acquired assets of the business,Red allocated $500,000 of the purchase price to a patent.The patent will expire in seven years.Determine the total amount that Red may amortize for 2010 for the patent.

The § 179 limit for a sports utility vehicle with a GVW of 7,000 pounds used in a trade or business is $25,000.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

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

Tax Credits and Payments

Part 1--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Part 2--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses,1231,and Recapure Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

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

The cost recovery method for all personal property under MACRS is 200% declining balance.

Intangible drilling costs may be expensed rather than capitalized and written off through depletion.

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

Cost depletion is determined by multiplying the depletion cost per unit by the number of units produced.

On November 1,2010,Red Corporation purchased an existing business.With respect to the acquired assets of the business,Red allocated $500,000 of the purchase price to a patent.The patent will expire in seven years.Determine the total amount that Red may amortize for 2010 for the patent.

The § 179 limit for a sports utility vehicle with a GVW of 7,000 pounds used in a trade or business is $25,000.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

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

Tax Credits and Payments

Part 1--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Part 2--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses,1231,and Recapure Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters