Property Acquisition And Cost Recovery

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Business Income,Deductions,and Accounting Methods
Property Acquisition and Cost Recovery
Property Dispositions
Entities Overview
Corporate Operations
Accounting for Income Taxes
Corporate Taxation: Nonliquidating Distributions
Corporate Formation,Neorganization,and Liquidation
Forming and Operating Partnerships
Dispositions of Partnership Interests and Partnership Distributions
S Corporations
State and Local Taxes
The Ustaxation of Multinational Transactions
Transfer Taxes and Wealth Planning

All Questions

Question 1

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True/False

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

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Question 2

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True/False

Tax cost recovery methods include depreciation,amortization,and depletion.

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Question 3

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True/False

If a business mistakenly claims too little depreciation,the business must only reduce the asset's basis by the depreciation actually taken rather than the amount of the allowable depreciation.

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Question 4

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True/False

An asset's capitalized cost basis includes only the actual purchase price; whereas expenses to purchase,prepare the asset for use,and begin using the asset are immediately expensed.

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Question 5

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True/False

The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair market value on the date of the transfer or conversion.

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Question 6

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Depreciation is currently computed under the Modified Accelerated Cost Recovery System (MACRS).

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Question 7

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The 200 percent or double declining balance method is allowable for five- and seven-year property.

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Question 8

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Taxpayers may use historical data to determine the recovery period for tax depreciation.

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Question 9

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Taxpayers use the half-year convention for all assets.

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Question 10

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If a taxpayer places only one asset (a building)in service during the fourth quarter of the year,the mid-quarter convention must be used.

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Question 11

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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.

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Question 12

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If tangible personal property is depreciated using the half-year convention and is disposed of during the first quarter of a subsequent year,the taxpayer must use the mid-quarter convention for the year of disposition.

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Question 13

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If a machine (seven-year property)being depreciated using the half-year convention is disposed of during the seventh year,a taxpayer must multiply the appropriate depreciation percentage from the MACRS table percentage by 50 percent to calculate the depreciation expense properly.

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Question 14

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Real property is always depreciated using the straight-line method.

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Question 15

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The mid-month convention applies to real property in the year of acquisition and disposition.

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Question 16

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All taxpayers may use the §179 immediate expensing election on certain property.

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Question 17

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The §179 immediate expensing election phases out based upon a taxpayer's taxable income.

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Question 18

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The §179 immediate expensing election phases out based upon the amount of tangible personal property a taxpayer places in service during the year.

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Question 19

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Property expensed under the §179 immediate expensing election is not included in the 40 percent test to determine whether the mid-quarter convention must be used.

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Question 20

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

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