1. Wheeler LLC purchased two assets during the current year (a full 12-month tax year). On November 16 Wheeler placed in service computer equipment (Five-year property) with a basis of $25,500 and on April 20 placed in service furniture (seven-year property) with a basis of $17,300. Calculate the maximum depreciation expense.

2. Littman LLC placed in service on July 29, 2019, machinery and equipment (seven-year property) with a basis of $600,000. Litman's income for the current year before any depreciation deduction was $100,000. Which of the following statement is true to maximize Litman's total depreciation deduction for 201?

A) Litman should take the $179 expense

B) Littman's $179 expense will be less than $100,000.

C) Littman should take no §179 expense.

D) Littman's $179 expense will be greater than $100,000.

E) None of the choices are correct.

3. Jasmine started a new business in the current year. She incurred $19,000 of start-up costs. How much of the start-up costs can be immediately deducted (excluding amounts amortized over 180 months) for the year?

A. $0

B. $2,500

C. $5,000

D. $10,000

E. None of these are correct

4. Santa Fe purchased the rights to extract turquoise on a tract of land over a five-year period. Santa Fe paid $770,250 for extraction rights. A geologist estimates that Santa Fe will recover 9,750 pounds of turquoise. During the current year, Sante Fe extracted 2,925 pounds of turquoise, which it sold for $491,000. What is Santa Fe's cost depletion deduction for the current years?

5.Gessner LLC patented a process it developed in the current year. The patent is expected tp create benefits for Gessner over 10-year period. The patent was issued on April 15th and the legal costs woth the patent were $43,000. In addition, Gessner had unamortized research expenditures of $15,000 related to the process. What is the total amortization amount Gessner may deduct during the current year?

6. Suvi, Inc, purchased two assets during the current year (a full 12-month tax year). On August 10 Suvi placed in service computer equipment (five-year property) with a basis of $20,000 and on November 18 placed in service machinery (seven-year property) with a basis of $10,000. Calculate the maximum depreciation expense (ignoring $179 and bonus depreciation) Use MACRS table 1.

7. An example of an asset that is both personal-use and personal property is:

1	A computer used solely to email company employees regarding company activities.
2	A storage building used by the CEO to store personal records.
3	A computer used solely to monitor the CEO's investments and to complete her Form 1040.
4	A company airplane used by the CEO for business travel.
5	All of the assets are personal-use and personal property.

8. Which one is not allowable method under MACRS?

1	150 percent declining balance
2	200 percent declining balance
3	Straight-line.
4	Sum-of-the-years-digits.
5	All of the choices are allowable methods under MACRS.

9. Simmons LLC purchased an office building and land several years ago for $250,000. The purchase price was allocated as follows: $200,000 to the building and $50,000 to the land. The property was placed in service on October 2. If the property is disposed of on Feb 27 during the 10th year, calculate Simmon's maximum depreciation in the 10Th year.

10. Sairra, LLC purchased only one asset during the current year (a full 12-month tax year). Sierra placed in service furniture (7-year property) on April 16 with a basis of $45,000. Calculate the maximum depreciation expense for the current year, rounding to a whole number (ignoring §179 and bonus depreciation):

Answer rating: 100% (QA)

1 Computer Equipment 4th quarter property 25500 Depreciation rate 5 Maximum Depreciation 1275 Furnit... View the full answer