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?
InvestingWe are still unsure of how to implement a currency hedge strategy based on the dollar's movement. So let’s focus on what’s easier to measure: time horizon.
Mutual Funds & ETFsExplore detailed analysis of the top three equity energy mutual funds, and learn about the characteristics and suitability of these funds.
Mutual Funds & ETFsDiscover detailed analysis of the top three mutual funds offering exposure to the emerging markets bonds, and learn about the suitability of these funds.
Stock AnalysisExamine the current state of Netflix Inc., and learn about three of the major fundamental risks that the company is currently facing.
Mutual Funds & ETFsLearn about the top three metals and mining exchange-traded funds (ETFs), and explore analyses of their characteristics and how investors can benefit from these ETFs.
ProfessionalsUnderstand the differences between a career in financial planning and wealth management, and identify which is better for you based on your goals and talents.
Mutual Funds & ETFsDiscover analyses of the top three California municipal bond mutual funds, and learn about their characteristics, historical performance and suitability.
Mutual Funds & ETFsFind out why mutual funds are not insured by the FDIC, including why the FDIC was created and how to minimize your risk with educated mutual fund investments.
InvestingThe further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
Personal FinanceMany advisors display similar skillsets that can make distinguishing between them difficult. The following guidelines can help you better understand their qualifications and services.
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.
A technique used by insurance companies to calculate loss reserves.
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 >>
While the majority of financial advisors work for financial institutions such as banks, a large proportion of them are self-employed ... Read Full Answer >>
The Federal Deposit Insurance Corporation, or FDIC, is a government-run agency that provides protection against losses if ... Read Full Answer >>
The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
The term delta refers to the change in price of an underlying stock or exchange-traded fund (ETF) as compared to the corresponding ... Read Full Answer >>