Homework 08

Homework 08 - Homework Federal Taxation II- Chapter 8 John...

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Homework Federal Taxation II- Chapter 8 John Durler 2. If a taxpayer does not take any cost recovery on an asset during the year, what will be the impact on the basis of the asset? If the depreciation was allowable, the basis of the asset at the time will include the depreciation whether the taxpayer claimed the depreciation or not. 5. Discuss whether the date an asset is placed in service is important in determining whether the mid- quarter convention applies for personalty. If more than 40% of the value of property other than real estate is placed in service during the last quarter of the year then the mid-quarter convention applies. Acquisition during the 1st quarter are allowed 10.5 months (3 ½ quarters) of cost recovery; the 2 nd quarter, 7.5 months (2 ½ quarters); the third quarter, 4.5 months (1 ½ quarter); and the 4 th quarter. 1.5 months (1/2 quarter). The timing of when the asset is placed in service would predicate the amount of the cost recovery. 19. Explain how the § 179 limited expensing deduction affects the computation of MACRS cost recovery. The
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Homework 08 - Homework Federal Taxation II- Chapter 8 John...

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