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tax 4001 chapter 10 smartbook.
tax 4001 chapter 10 smartbook.
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tax 4001 chapter 10 smartbook__________ - __________ property is any property such as clothing, a home, or a car,
that is for purposes OTHER THAN use in a trade, business, or income-producing
venture. Machinery, furniture, and any other tangible property other than buildings and
land is designated as __________ property. The term that includes buildings and land is
__________ property. - ANS-Personal, Use, Personal, Real
A calendar year-end business purchased a new delivery truck at the end of March
during the current year. The truck was the only asset purchased during the year. Which
of the following statements is correct regarding the depreciation that can be taken on
the truck? - ANS-The business will deduct one-half of a full year's depreciation on the
truck in the current year.
Andrew's Art Studio, a calender year company, purchased three assets during the year.
A computer costing $1,500 was purchased in April; office furniture costing $1,800 was
purchased in July; and a delivery truck costing $17,000 was purchased in October.
Which of the following statements is correct regarding the depreciation of the assets
(assuming no bonus deprecation is taken)?
Multiple choice question.
The art studio can use the half-year convention for the computer and the office furniture
if the delivery truck is expensed under Section 179.
The art studio must use the mid-quarter convention for any assets that are not
expensed under Section 179.
The art studio can only use Sec. 179 to expense the computer and office furniture. The
truck must be depreciated using the mid-quarter convention.
The art studio should use the half-year convention for the computer and the office
furniture and the mid-quarter convention f - ANS-The art studio can use the half-year
convention for the computer and the office furniture if the delivery truck is expensed
under Section 179.
Antoine owns a car. He uses the car for personal transportation. What is the property
classification of this car? - ANS--personal property-personal use property
Barbara's Bakery purchased three new 7-year assets last year. She chose NOT to use
Section 179 immediate expensing or take bonus depreciation. The furnishings were
purchased for $15,000 in April, the equipment for $6,000 in July, and the appliances for
$40,000 in November. What amount of depreciation expense is allowable in the current
(second) year of ownership? - ANS-16,072
, During the second quarter of Year 1, Barbara's Bakery purchased furnishings (7 year
property) at an original cost of $15,000. She did NOT take bonus depreciation or
Section 179 expense in the year of purchase. Due to other asset purchases in Year 1,
the mid-quarter convention is being used for calculating the depreciation on the
furnishings. If Barbara sells the furnishings in October of Year 4 how much can she
deduct for depreciation in the year of sale? - ANS-Reason:($15,000 x.1197) x.875 =
$1,571
Harry inherited 100 shares of stock from his aunt upon her death. Harry's aunt
purchased the stock 10 years ago for $20 per share. The stock was worth $50 per
share on the date she died. What is the amount of Harry's basis in the stock?
Multiple choice question.
$50
$2000
$5000
$20 - ANS-5000
Harry received 100 shares of stock from his aunt as a gift. Harry's aunt purchased the
stock 10 years ago for $20 per share. The stock was worth $50 per share on the date
Harry received the gift. Harry sold the stock for $60 per share. What is the amount of
Harry's basis in the stock? - ANS-$2000
In order to compute MACRS depreciation, which of the following pieces of information is
NOT required?
Multiple choice question.
salvage or residual value for the asset
depreciation convention used in the year of purchase
cost or original basis of the asset
recovery period for the asset
depreciation method chosen by the business
date placed in service - ANS-salvage or residual value for the asset
In which accounting area(s) is an asset's estimated useful life determined by the
taxpayer's assessment, rather than being predetermined based on asset type? -
ANS-financial accounting only
Jack and Diane decided to remodel their kitchen. They removed their old cabinets and
replaced them with newer, nicer cabinets. They installed the old cabinets in a rental
home that they own and lease to other people. The original cost of the old cabinets was
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