Depreciation And Cost-Recovery Concepts - Sample Questions 1 - 7
1. Which of the following properties must use cost depletion?
A) Oil wells
B) Gas wells
2. Lefty Printing Company purchased a new printing press for $1 million. Under Section 179 rules, a small business is allowed a first year deduction for equipment in what amount?
D) $1 million
3. If the new printing press that Lefty Printing Company just purchased cost them $2,350,000, then how much would be their first year deduction under the Section 179 rules?
4. Chicago Computers Inc. (CCI) purchased some equipment last year to be used for their computer business. If the owner of CCI wants to maximize her tax depreciation, then she should use which depreciation method?
A) Accelerated Cost Recovery System (ACRS)
B) Straight-Line depreciation
C) Amortization Fast Line Method
D) Modified Accelerated Cost Recovery System (MACRS)
5. Which of the following Section 197 intangible property would qualify for Amortization:
(2) Sports franchise
(3) Interests in land
(5) Costs of acquiring customer lists
A) 1, 3 and 5 only
B) 1, 3 and 4 only
C) 1, 4 and 5 only
D) 1, 2 and 4 only
6. Value Cola Canning had 125 employees and a taxable income of $275,000 this year. They purchased $1 million in new canning equipment during the year, and their CPA is recommending the Section 179 deduction. What is their maximum allowable deduction under Section 179 and carry forward amount (if any) for this year's tax filing?
A) Maximum Section 179 deduction is $275,000 / Carry forward is $225,000.
B) Maximum Section 179 deduction is $500,000 / Carry forward is $0.
C) Maximum Section 179 deduction is $1,000,000 / Carry forward is $0.
D) Maximum Section 179 deduction is $0 / Carry forward is $500,000.
7. Jeffrey purchased a truck this year (year one). He used the truck for business use 75% of the time. His adjusted gross income was $70,000 and the cost of the truck was $30,000. The MACRS statutory percentage for five-year property in year one is 20%. What is Jeffrey's depreciation deduction for year one?
Options & FuturesFutures have a number of advantages over options such as fixed upfront trading costs, lack of time decay and liquidity.
Products and InvestmentsThe 10 steps outlined here are essential to the creation of a new financial product.
ProfessionalsHere's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant.
ProfessionalsThere’s no typical day in the life of a public accountant, but one accountant’s experience may shed some light on what the career entails.
Saving and SpendingRetirees who don't want to deplete their nest eggs during a bear market should make sure to do the following.
Mutual Funds & ETFsGet a brief overview of Fidelity's seven target risk funds, with a description of each fund's asset allocation and expense ratio.
Investing NewsWarning signs have started to emerge that point to a potentially dismal 2016 for the U.S. economy.
MarketsAlgorithmic HFT has a number of risks, and it also can amplify systemic risk because of its propensity to intensify market volatility.
Mutual Funds & ETFsExplore analyses of the top three Invesco mutual funds for retirement diversification in 2016, and learn about the characteristics of these target-date funds.
Investing BasicsHedging risk is always a good idea. Here is how sophisticated investors go about it.
A modification of the Sharpe ratio that differentiates harmful ...
The excess return that investing in the stock market provides ...
The amount of risk that an insurance company retains after subtracting ...
Coverage that provides financial protection to investors, financial ...
The maximum loss from a peak to a trough of a portfolio, before ...
The absolute level of a fund's investments.
Different types of orders allow you to be more specific about how you'd like your broker to fulfill your trades. When you ... Read Full Answer >>
Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>
While your auto insurance company cannot pull your full motor vehicle report, or MVR, it does pull a record summary that ... Read Full Answer >>