Exam 2: Property Acquisition and Cost Recovery

Jasmine started a new business in the current year. She incurred $10,000 of start-up costs. How much of the start-up costs can be immediately expensed (excluding amounts amortized over 180 months) for the year?

(Multiple Choice)

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Question 41

Which of the allowable methods allows the most accelerated depreciation?

(Multiple Choice)

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Question 42

Alexandra purchased a $35,000 automobile during 2016. The business use was 70 percent. What is the allowable depreciation for the current year? (ignore any possible bonus depreciation)

(Short Answer)

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Question 43

If a machine (seven-year property) being depreciated using the half-year convention is disposed of during the seventh year, a taxpayer must multiply the appropriate depreciation percentage from the MACRS table percentage by 50 percent to calculate the depreciation expense properly.

(True/False)

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(86)

Question 44

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

(True/False)

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Question 45

Goodwill and customer lists are examples of §197 amortizable assets.

(True/False)

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Question 46

Tax depreciation is currently calculated under what system?

(Multiple Choice)

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Question 47

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.)

(Multiple Choice)

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Question 48

Columbia LLC only purchased one asset this year. Columbia LLC placed in service on October 9, 2016 machinery and equipment (7-year property) with a basis of $2,150,000. Assume that Columbia has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing) for the year, rounded to the nearest whole number. Assume the 2015 §179 limits are identical to 2016.

(Short Answer)

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(100)

Question 49

Businesses deduct percentage depletion when they sell the natural resource and they deduct cost depletion in the year they produce or extract the natural resource.

(True/False)

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(79)

Question 50

Bonnie Jo used two assets during the current year. The first was computer equipment with an original basis of $15,000, currently in the second year of depreciation, and under the half-year convention. This asset was disposed of on October 1^st of the current year. The second was furniture with an original basis of $24,000 placed in service during the first quarter, currently in the fourth year of depreciation, and under the mid-quarter convention. What is Bonnie Jo's depreciation expense for the current year, rounded to the nearest whole number?

(Short Answer)

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(82)

Question 51

Olney LLC only purchased one asset this year. Olney LLC placed in service on July 19, 2016 machinery and equipment (7-year property) with a basis of $850,000. Assume that Olney has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing, rounded to the nearest whole number (but ignoring bonus expensing). Assume the 2015 §179 limits are identical to 2016.

(Short Answer)

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(69)

Question 52

Poplock LLC purchased a warehouse and land during the current year for $350,000. The purchase price was allocated as follows: $275,000 to the building and $75,000 to the land. The property was placed in service on August 12. Calculate Poplock's maximum depreciation for this first year, rounded to the nearest whole number:

(Multiple Choice)

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Question 53

Which of the following business assets is not depreciated?

(Multiple Choice)

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Question 54

Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 23^rd of the current year, what is the total expense she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?

(Multiple Choice)

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(86)

Question 55

Tax cost recovery methods do not include:

(Multiple Choice)

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(72)

Question 56

If a business mistakenly claims too little depreciation, the business must only reduce the asset's basis by the depreciation actually taken rather than the amount of the allowable depreciation.

(True/False)

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(88)

Question 57

Tom Tom LLC purchased a rental house and land during the current year for $150,000. The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land. The property was placed in service on May 22. Calculate Tom Tom's maximum depreciation for this first year:

(Multiple Choice)

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(81)

Question 58

Business assets that tend to be used for both business and personal purposes are referred to as listed property.

(True/False)

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Question 59

The 200 percent or double declining balance method is allowable for five and seven-year property.

(True/False)

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(72)

Question 60

Showing 41 - 60 of 107

Jasmine started a new business in the current year. She incurred $10,000 of start-up costs. How much of the start-up costs can be immediately expensed (excluding amounts amortized over 180 months) for the year?

Which of the allowable methods allows the most accelerated depreciation?

Alexandra purchased a $35,000 automobile during 2016. The business use was 70 percent. What is the allowable depreciation for the current year? (ignore any possible bonus depreciation)

If a machine (seven-year property) being depreciated using the half-year convention is disposed of during the seventh year, a taxpayer must multiply the appropriate depreciation percentage from the MACRS table percentage by 50 percent to calculate the depreciation expense properly.

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

Goodwill and customer lists are examples of §197 amortizable assets.

Tax depreciation is currently calculated under what system?

Businesses deduct percentage depletion when they sell the natural resource and they deduct cost depletion in the year they produce or extract the natural resource.

Which of the following business assets is not depreciated?

Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 23^rd of the current year, what is the total expense she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?

Tax cost recovery methods do not include:

If a business mistakenly claims too little depreciation, the business must only reduce the asset's basis by the depreciation actually taken rather than the amount of the allowable depreciation.

Tom Tom LLC purchased a rental house and land during the current year for $150,000. The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land. The property was placed in service on May 22. Calculate Tom Tom's maximum depreciation for this first year:

Business assets that tend to be used for both business and personal purposes are referred to as listed property.

The 200 percent or double declining balance method is allowable for five and seven-year property.

Business Income, Deductions, and Accounting Methods

Property Dispositions

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 2: Property Acquisition and Cost Recovery

Jasmine started a new business in the current year. She incurred $10,000 of start-up costs. How much of the start-up costs can be immediately expensed (excluding amounts amortized over 180 months) for the year?

Which of the allowable methods allows the most accelerated depreciation?

Alexandra purchased a $35,000 automobile during 2016. The business use was 70 percent. What is the allowable depreciation for the current year? (ignore any possible bonus depreciation)

If a machine (seven-year property) being depreciated using the half-year convention is disposed of during the seventh year, a taxpayer must multiply the appropriate depreciation percentage from the MACRS table percentage by 50 percent to calculate the depreciation expense properly.

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

Goodwill and customer lists are examples of §197 amortizable assets.

Tax depreciation is currently calculated under what system?

Businesses deduct percentage depletion when they sell the natural resource and they deduct cost depletion in the year they produce or extract the natural resource.

Which of the following business assets is not depreciated?

Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 23rd of the current year, what is the total expense she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?

Tax cost recovery methods do not include:

If a business mistakenly claims too little depreciation, the business must only reduce the asset's basis by the depreciation actually taken rather than the amount of the allowable depreciation.

Tom Tom LLC purchased a rental house and land during the current year for $150,000. The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land. The property was placed in service on May 22. Calculate Tom Tom's maximum depreciation for this first year:

Business assets that tend to be used for both business and personal purposes are referred to as listed property.

The 200 percent or double declining balance method is allowable for five and seven-year property.

Business Income, Deductions, and Accounting Methods

Property Dispositions

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

Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 23^rd of the current year, what is the total expense she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?