Question 1

Simmons LLC purchased an office building and land several years ago for $250,000. The purchase price was allocated as follows: $200,000 to the building and $50,000 to the land. The property was placed in service on October 2. If the property is disposed of on February 27 during the 10th year, calculate Simmons' maximum depreciation in the 10th year. (Use MACRS Table 5)  EXHIBIT 10-6

Accepted Answer

A)   $641.
B)   $909.
C)   $5,128.
D)   $7,346.
E)   None of the choices are correct.F) B) and D)
G) D) and E)

Question 2

Bonus depreciation is used as a stimulus tool by tax policy makers.

Accepted Answer

A) True 
 B)False

Question 3

Taylor LLC purchased an automobile for $55,000 on July 5, 2018. What is Taylor's maximum depreciation expense for 2018 if its business use percentage is 100 percent?

Accepted Answer

A)   $10,000.
B)   $11,000.
C)   $18,000.
D)   $55,000.
E)   None of the choices are correct.F) C) and D)
G) C) and E)

Question 4

Taxpayers use the half-year convention for all assets.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The MACRS depreciation tables automatically switch to the straight-line method when the straight-line method yields a higher annual depreciation amount than the declining balance method.

Accepted Answer

A) True 
 B)False

Question 7

In general, a taxpayer should select longer-lived property for the §179 immediate expensing election.

Accepted Answer

A) True 
 B)False

Question 8

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 the methods would allow accelerated depreciation.F) A) and B)
G) None of the above

Question 9

Alexandra purchased a $55,000 automobile during 2018. The business use was 70 percent. What is the allowable depreciation for the current year (ignore any possible bonus depreciation)? (Use Exhibit 10-10)

Accepted Answer

$7,000
The maximum depreciation for a lu...

Exam 10: Property Acquisition and Cost Recovery

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

Correct Answer
verified

The MACRS depreciation tables automatically switch to the straight-line method when the straight-line method yields a higher annual depreciation amount than the declining balance method.

Correct Answer
verified

Taylor LLC purchased an automobile for $55,000 on July 5, 2018. What is Taylor's maximum depreciation expense for 2018 if its business use percentage is 100 percent?

Correct Answer
verified

Which of the allowable methods allows the most accelerated depreciation?

Correct Answer
verified

In general, a taxpayer should select longer-lived property for the §179 immediate expensing election.

Correct Answer
verified

Alexandra purchased a $55,000 automobile during 2018. The business use was 70 percent. What is the allowable depreciation for the current year (ignore any possible bonus depreciation)? (Use Exhibit 10-10)

Correct Answer
verified
$7,000
The maximum depreciation for a lu...
View Answer

Taxpayers use the half-year convention for all assets.

Correct Answer
verified

Correct Answer
verified

Bonus depreciation is used as a stimulus tool by tax policy makers.

Correct Answer
verified

Exam 10: Property Acquisition and Cost Recovery

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

Correct AnswerverifiedShow Answer

The MACRS depreciation tables automatically switch to the straight-line method when the straight-line method yields a higher annual depreciation amount than the declining balance method.

Correct AnswerverifiedShow Answer

Taylor LLC purchased an automobile for $55,000 on July 5, 2018. What is Taylor's maximum depreciation expense for 2018 if its business use percentage is 100 percent?

Correct AnswerverifiedShow Answer

Which of the allowable methods allows the most accelerated depreciation?

Correct AnswerverifiedShow Answer

In general, a taxpayer should select longer-lived property for the §179 immediate expensing election.

Correct AnswerverifiedShow Answer

Alexandra purchased a $55,000 automobile during 2018. The business use was 70 percent. What is the allowable depreciation for the current year (ignore any possible bonus depreciation)? (Use Exhibit 10-10)

Correct Answerverified$7,000The maximum depreciation for a lu...View AnswerShow Answer

Taxpayers use the half-year convention for all assets.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Bonus depreciation is used as a stimulus tool by tax policy makers.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$7,000
The maximum depreciation for a lu...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified