1. Alice purchases a rental house on august 22 2014
for a cost of 174,000. of this amount 100,000 is considered to be
allocable to the cost of the home, with the remaining 74,000 allocable
to the cost of the land. what is alice's maximum depreciation deduction
for 2014 using MACRS? : 2,373, 2,071, 1,364, 1,190, or 1,009.
2. an asset put in service in june 2014 has a
depreciable basis 35,000 and a recovery period of 5 years. assuming no
election to expense is made, and no bonus depreciation taken, what is
the maximum amount of cost that can be deducted in 2014?: 5,833,
11,667, 7,000, or 35,000.
3. which of the following statements with respect to the depreciation of property under MACRS is incorrect ?:
in some cases tax payers places a significant
amount of property in service during the last quarter of the year, real
property must be depreciated using a mid quarter convention,
under the half year convention one half year of depreciation is allowed in the year the property is placed in service,
salvage value is not used to compute MACRS tax depreciation, or
real property acquired after 1986 must be depreciated using the straightline method.
4. assume that a taxpayer purchases a computer in 2014 that the tax payer thinks will last for 10 years. if the computer is used 100 percent for business and no election to expense under section 179 was made, what is MACRS recovery period that must be used for the cost recovery on the tax payers tax return?: 7 years, 5 years 10 years or 1 year.
5. on july 20 2014 kelli purchases office equipment at a cost of 13,000. kelli makes the election to expense under section 179 for 2014. she is self employed as an attorney, and in 2014 her business has a net income of 6,000 before considering this election to expense. kelli has no other income or expenses for the year. what is the maximum amount that kelli may deduct for 2014 for total depreciation, assuming she elects to expense the entire 13,000 purchase under section 179: 24,000,13,000, 6,000, or 3,000.
6. which of the following is not considered listed property for purposes of determing the tax payers depreciation deduction ?
a computer used exclusively by the taxpayer for managing investment portfolio,
an automobile used 40 percent by an employee in providing services to his employer,
a computer used by a bank representative on the bank premises in performing services as an employee, or
a computer used by a taxpayer 40 percent in managing her investment portfolio and 20 percent in her business as an accountant.
7. the amortization for section 197 intangible is 7, 5, 15, or 10 years.
8. joe sold stock to rose for 13,000 its fair market value. the stock cost joe 16,000 5 years ago. also joe sold earl (an unrelated party ) stock for 6,500 that cost 7,500 3 years ago. rose and joe are brother and sister. what is joes recognized loss for these two transactions: 3,000,6,500, 1000, 4000, or 0.
