· Question 1
2 out of 2 points
In a farming business, MACRS straight-line cost recovery is required for all fruit bearing trees.
· Question 2
2 out of 2 points
Property which is classified as personalty may be depreciated.
· Question 3
2 out of 2 points
Diane purchased a factory building on April 15, 1993, for $5,000,000. She sells the factory building on February 2, 2013. Determine the cost recovery deduction for the year of the sale.
· Question 4
0 out of 2 points
Which of the following assets would be subject to cost recovery?
· Question 5
0 out of 2 points
Under the MACRS straight-line election for personalty, only the half-year convention is applicable.
· Question 6
2 out of 2 points
OnJune 1of the current year, Tab converted a machine from personal use to rental property. At the time of the conversion, the machine was worth $90,000. Five years ago Tab purchased the machine for $120,000. The machine is still encumbered by a $50,000 mortgage. What is the basis of the machine for cost recovery?
· Question 7
2 out of 2 points
Mary purchased a new five-year class asset on March 7, 2013. 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 $900,000. Mary made the § 179 election. The income from the business before the § 179 deduction was $600,000. Mary does take additional first-year depreciation. Determine the total deductions with respect to the asset for 2013.
· Question 8
2 out of 2 points
When lessor owned leasehold improvements are abandoned because of the termination of the lease, a loss can be taken for the unrecovered basis.
· Question 9
0 out of 2 points
Percentage depletion enables the taxpayer to recover more than the cost of an asset.
· Question 10
2 out of 2 points
For personal property placed in service in 2013, the § 179 maximum deduction is limited to $500,000.