QUESTION 1

1. Brittany started a law practice as a sole proprietor. She owned a computer, printer, desk, and file cabinet she purchased during law school (several years ago) that she is planning to use in her business. What is the depreciable basis that Brittany should use in her business for each asset, given the following information?

   Asset Purchase Price FMV at Time Converted

   Computer $2,500 $600

   Printer $300 $150

   Desk $1,200 $900

   File cabinet $200 $225

QUESTION 2

1. Gary inherited a Maine summer cabin on 10 acres from his grandmother. His grandparents originally purchased the property for $500 in 1950 and built the cabin at a cost of $10,000 in 1965. His grandfather died in 1980 and when his grandmother recently passed away, the property was appraised at $550,000 for the land and $750,000 for the cabin. Since Gary doesnt currently live in New England, he decided that it would be best to put the property to use as a rental. What is Garys combined basis in both the land and cabin?

QUESTION 3

1. At the beginning of the year, Poplock began a calendar-year dog boarding business called Griffs Palace. Poplock bought and placed in service the following assets during the year:

   Asset Date Acquired Cost Basis

   Computer equipment 3/23 $6,000

   Dog grooming furniture 5/12 $7,000

   Pickup truck 9/17 $10,000

   Commercial building 10/11 $260,000

   Land (one acre) 10/11 $80,000

   Assuming Poplock does not elect 179 expensing or bonus depreciation, what is Poplocks year 1 depreciation expense for each asset?

QUESTION 4

1. At the beginning of the year, Poplock began a calendar-year dog boarding business called Griffs Palace. Poplock bought and placed in service the following assets during the year:

   Asset Date Acquired Cost Basis

   Computer equipment 3/23 $6,000

   Dog grooming furniture 5/12 $7,000

   Pickup truck 9/17 $10,000

   Commercial building 10/11 $260,000

   Land (one acre) 10/11 $80,000

   Assuming Poplock does not elect 179 expensing or bonus depreciation, what is Poplocks year 2 depreciation expense for each asset?