Question 1

On May 30, 2018, Jane purchased a factory building to use for her business.In August 2019, Jane paid $300,000 for improvements to the building.Determine Jane's total deduction with respect to the building improvements for 2019.

Accepted Answer

A)  $2,889
B)  $4,173
C)  $4,815
D)  $25,000E) A) and C)
F) B) and C)

Question 2

On June 1, 2018, Irene places in service a new automobile that cost $21,000.The car is used 70% for business and 30% for personal use.(Assume this percentage is maintained for the life of the car.)  She does not take additional first-year depreciation.Determine the cost recovery deduction for 2019.

Accepted Answer

A)  $3,290
B)  $3,570
C)  $4,704
D)  $10,000E) C) and D)
F) None of the above

Question 3

Polly purchased a new hotel on July 20, 2019, for $6,000,000.On January 20, 2026, the building was sold.Determine the cost recovery deduction for the year of the sale.

Accepted Answer

$6,410 ($6...

Question 4

For a new car that is used predominantly in business, the "luxury auto" limit depends on whether the taxpayer takes
MACRS or straight-line depreciation.

Accepted Answer

A) True 
 B)False

Question 5

Once the more-than-50% business usage test is passed for listed property, it still matters if the business usage for the property drops to 50% or less during the recovery period.

Accepted Answer

A) True 
 B)False

Question 6

The cost recovery period for three-year class property is four years.

Accepted Answer

A) True 
 B)False

Question 7

Rod paid $1,950,000 for a new warehouse on April 14, 2019.He sold the warehouse on September 29, 2024.
Determine the cost recovery deduction for 2019 and 2024.

Accepted Answer

2019: $1,950,000 × 0...

Question 8

Under MACRS, the double-declining balance method is used for property other than real estate with a recovery period of 15 or 20 years.

Accepted Answer

A) True 
 B)False

Exam 8: Depreciation, Cost Recovery, Amortization, and Depletion

Polly purchased a new hotel on July 20, 2019, for $6,000,000.On January 20, 2026, the building was sold.Determine the cost recovery deduction for the year of the sale.

Correct Answer
verified
$6,410 ($6...
View Answer

Once the more-than-50% business usage test is passed for listed property, it still matters if the business usage for the property drops to 50% or less during the recovery period.

Correct Answer
verified

On May 30, 2018, Jane purchased a factory building to use for her business.In August 2019, Jane paid $300,000 for improvements to the building.Determine Jane's total deduction with respect to the building improvements for 2019.

Correct Answer
verified

Under MACRS, the double-declining balance method is used for property other than real estate with a recovery period of 15 or 20 years.

Correct Answer
verified

Rod paid $1,950,000 for a new warehouse on April 14, 2019.He sold the warehouse on September 29, 2024. Determine the cost recovery deduction for 2019 and 2024.

Correct Answer
verified
2019: $1,950,000 × 0...
View Answer

For a new car that is used predominantly in business, the "luxury auto" limit depends on whether the taxpayer takes MACRS or straight-line depreciation.

Correct Answer
verified

The cost recovery period for three-year class property is four years.

Correct Answer
verified

On June 1, 2018, Irene places in service a new automobile that cost $21,000.The car is used 70% for business and 30% for personal use.(Assume this percentage is maintained for the life of the car.) She does not take additional first-year depreciation.Determine the cost recovery deduction for 2019.

Correct Answer
verified

Exam 8: Depreciation, Cost Recovery, Amortization, and Depletion

Polly purchased a new hotel on July 20, 2019, for $6,000,000.On January 20, 2026, the building was sold.Determine the cost recovery deduction for the year of the sale.

Correct Answerverified$6,410 ($6...View AnswerShow Answer

Once the more-than-50% business usage test is passed for listed property, it still matters if the business usage for the property drops to 50% or less during the recovery period.

Correct AnswerverifiedShow Answer

On May 30, 2018, Jane purchased a factory building to use for her business.In August 2019, Jane paid $300,000 for improvements to the building.Determine Jane's total deduction with respect to the building improvements for 2019.

Correct AnswerverifiedShow Answer

Under MACRS, the double-declining balance method is used for property other than real estate with a recovery period of 15 or 20 years.

Correct AnswerverifiedShow Answer

Rod paid $1,950,000 for a new warehouse on April 14, 2019.He sold the warehouse on September 29, 2024. Determine the cost recovery deduction for 2019 and 2024.

Correct Answerverified2019: $1,950,000 × 0...View AnswerShow Answer

For a new car that is used predominantly in business, the "luxury auto" limit depends on whether the taxpayer takes MACRS or straight-line depreciation.

Correct AnswerverifiedShow Answer

The cost recovery period for three-year class property is four years.

Correct AnswerverifiedShow Answer

On June 1, 2018, Irene places in service a new automobile that cost $21,000.The car is used 70% for business and 30% for personal use.(Assume this percentage is maintained for the life of the car.) She does not take additional first-year depreciation.Determine the cost recovery deduction for 2019.

Correct AnswerverifiedShow Answer

Correct Answer
verified
$6,410 ($6...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
2019: $1,950,000 × 0...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified