Question 1

Columbia LLC only purchased one asset this year.Columbia LLC placed in service on October 9,2017 machinery and equipment (7-year property)with a basis of $2,150,000.Assume that Columbia has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing)for the year.(Use MACRS Table 2 in the text)(Round final answer to the nearest whole number)

Accepted Answer

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Question 2

Eddie purchased only one asset during the current year.Eddie placed in service furniture (7-year property)on May 1ˢᵗ with a basis of $26,500.Calculate the maximum depreciation expense,rounded to the nearest whole number (ignoring §179 and bonus depreciation).(Use MACRS Table 1 in the text)

Accepted Answer

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Question 3

Yasmin purchased two assets during the current year.Yasmin placed in service computer equipment (5-year property)on May 26ᵗʰ with a basis of $10,000 and machinery (7-year property)on December 9ᵗʰ with a basis of $10,000.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 2 in the text)

Accepted Answer

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Question 4

Bonnie Jo used two assets during the current year.The first was computer equipment with an original basis of $15,000,currently in the second year of depreciation,and under the half-year convention.This asset was disposed of on October 1st of the current year.The second was furniture with an original basis of $24,000 placed in service during the first quarter,currently in the fourth year of depreciation,and under the mid-quarter convention.What is Bonnie Jo's depreciation expense for the current year? (Round final answer to the nearest whole number)(Use MACRS Table 1 and Table 2 in the text)

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Question 5

Amit purchased two assets during the current year.Amit placed in service computer equipment (5-year property)on April 16ᵗʰ with a basis of $5,000 and furniture (7-year property)on September 9ᵗʰ with a basis of $20,000.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 1 in the text)

Accepted Answer

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Question 6

Roth,LLC purchased only one asset during the current year.Roth placed in service computer equipment (5-year property)on November 1ˢᵗ with a basis of $42,500.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 2 in the text)

Accepted Answer

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Question 7

During April of the current year,Ronen purchased a warehouse that he used for business purposes.The basis was $1,600,000.Calculate the maximum depreciation expense during the current year.(Use MACRS Table 5 in the text)

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Question 8

Timothy purchased a new computer for his consulting practice on October 15ᵗʰ of the current year.The basis of the computer was $4,000.During the Thanksgiving holiday,he decided the computer didn't meet his business needs and gave it to his college-aged son in another state.The computer was never used for business purposes again.Timothy had $50,000 of taxable income before depreciation.What is Timothy's total cost recovery expense with respect to the computer during the current year?

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Question 9

Northern LLC only purchased one asset this year.In 2017,Northern LLC placed in service on September 6ᵗʰ machinery and equipment (7-year property)with a basis of $2,200,000.Assume that Northern has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing (ignore any potential bonus expensing).(Use MACRS Table 1 in the text)(Round final answer to the nearest whole number)

Accepted Answer

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Question 10

Kristine sold two assets on March 20th of the current year.The first was machinery with an original basis of $51,000,currently in the fourth year of depreciation,and under the half-year convention.The second was furniture with an original basis of $16,000 placed in service during the fourth quarter,currently in the third year of depreciation,and under the mid-quarter convention.What is Kristine's depreciation expense for the current year if the depreciation recovery period is 7-years? (Use MACRS Table 1 and Table 2 in the text)EXHIBIT 10-6 in the text (Round final answer to the nearest whole number)

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Question 11

Alexandra purchased a $35,000 automobile during 2017.The business use was 70 percent.What is the allowable depreciation for the current year (ignore any possible bonus depreciation)?  Exhibit 10-8 in the text

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Question 12

Phyllis purchased $8,000 of specialized audio equipment that she uses in her business regularly.Occasionally,she uses the equipment for personal use.During the first year,Phyllis used the equipment for business use 70 percent of the time; however,during the current (second)year the business use fell to 40 percent.Assume that the equipment is seven-year MACRS property and is under the half-year convention.Assume the ADS recovery period is 10 years.What is the depreciation allowance for the current year? (Use MACRS Table 1 in the text)(Round final answer to the nearest whole number)

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Question 13

Teddy purchased only one asset during the current year.Teddy placed in service machinery (7-year property)on October 1ˢᵗ with a basis of $76,500.Calculate the maximum depreciation expense,rounded to the nearest whole number (ignoring §179 and bonus depreciation).(Use MACRS Table 2 in the text)

Accepted Answer

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Question 14

Flax,LLC purchased only one asset this year.Flax placed in service a computer (5-year property)on January 16 with a basis of $14,000.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 1 in the text)

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Question 15

Reid acquired two assets in 2017: computer equipment (5-year property)acquired on August 6ᵗʰ with a basis of $510,000 and machinery (7-year property)on November 9th with a basis of $510,000.Assume that Reid has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing (but not bonus expensing).(Use MACRS Table 1 in the text)

Accepted Answer

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Question 16

An office building was purchased on December 9ᵗʰ several years ago for $2,500,000.The purchase price was allocated as follows: building $1,900,000,landscaping $100,000,and land $500,000.During the current year,the 10ᵗʰ year,the building was sold on March 10ᵗʰ.Calculate the maximum depreciation expense for the real property during the current year,rounded to the nearest whole number.(Use MACRS Table 5 in the text)

Accepted Answer

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Question 17

During August of the prior year,Julio purchased an apartment building that he used as a rental property.The basis was $1,400,000.Calculate the maximum depreciation expense during the current year.(Use MACRS Table 3 in the text)

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Question 18

Olney LLC only purchased one asset this year.Olney LLC placed in service on July 19,2017 machinery and equipment (7-year property)with a basis of $850,000.Assume that Olney has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing,(but ignoring bonus expensing).(Use MACRS Table 1 in the text)(Round final answer to the nearest whole number)

Accepted Answer

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Question 19

Boxer LLC has acquired various types of assets recently used 100% in its trade or business.Below is a list of assets acquired during 2016 and 2017:
  Boxer did not elect §179 expense and elected out of bonus depreciation in 2016,but would like to elect §179 expense for 2017 (assume that taxable income is sufficient).Calculate Boxer's maximum depreciation expense for 2017,(ignore bonus depreciation for 2017).If necessary,use the 2016 luxury automobile limitation amount for 2017.(Use MACRS Table 1 and Use MACRS Table 5 in the text)Exhibit 10-8 in the text (Round final answer to the nearest whole number)

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Question 20

Jaussi purchased a computer several years ago for $2,200 and used it for personal purposes.On November 10ᵗʰ of the current year,when the fair market value of the computer was $800,Jaussi converted it to business use.What is Jaussi's tax basis for the computer?

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Quiz 10: Property Acquisition and Cost Recovery

Eddie purchased only one asset during the current year.Eddie placed in service furniture (7-year property)on May 1ˢᵗ with a basis of $26,500.Calculate the maximum depreciation expense,rounded to the nearest whole number (ignoring §179 and bonus depreciation).(Use MACRS Table 1 in the text)

Roth,LLC purchased only one asset during the current year.Roth placed in service computer equipment (5-year property)on November 1ˢᵗ with a basis of $42,500.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 2 in the text)

During April of the current year,Ronen purchased a warehouse that he used for business purposes.The basis was $1,600,000.Calculate the maximum depreciation expense during the current year.(Use MACRS Table 5 in the text)

Alexandra purchased a $35,000 automobile during 2017.The business use was 70 percent.What is the allowable depreciation for the current year (ignore any possible bonus depreciation)? Exhibit 10-8 in the text

Teddy purchased only one asset during the current year.Teddy placed in service machinery (7-year property)on October 1ˢᵗ with a basis of $76,500.Calculate the maximum depreciation expense,rounded to the nearest whole number (ignoring §179 and bonus depreciation).(Use MACRS Table 2 in the text)

Flax,LLC purchased only one asset this year.Flax placed in service a computer (5-year property)on January 16 with a basis of $14,000.Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).(Use MACRS Table 1 in the text)

During August of the prior year,Julio purchased an apartment building that he used as a rental property.The basis was $1,400,000.Calculate the maximum depreciation expense during the current year.(Use MACRS Table 3 in the text)

Jaussi purchased a computer several years ago for $2,200 and used it for personal purposes.On November 10ᵗʰ of the current year,when the fair market value of the computer was $800,Jaussi converted it to business use.What is Jaussi's tax basis for the computer?