mega sample test questions - ch 8

mega sample test questions - ch 8 - Mega sample test...

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Mega sample test questions - chapters 8 True/False Indicate whether the statement is true or false. ____ 1. The concept of depreciation is based on the premise that an asset benefits more than one accounting period. ____ 2. The basis of cost recovery property must be reduced by the cost recovery allowed. ____ 3. The key date for calculating cost recovery is the date the asset is purchased. ____ 4. Land improvements are generally not eligible for cost recovery. ____ 5. The cost recovery basis for property converted from personal use to business use is the fair market value of the property at the time of the conversion. ____ 6. If 150% declining-balance is used, there is no straight-line switchover. ____ 7. Under the MACRS mid-quarter convention, an asset sold on December 10 will be treated as though it were sold on November 15 for a calendar year taxpayer. ____ 8. If more than 40% of the value of property, other than real property, is placed in service during the last quarter, all of the property will be allowed 1.5 months of cost recovery. ____ 9. Under MACRS, if the mid-quarter convention is applicable, all property sold is treated as being sold at the mid-point of the quarter in which it is sold. ____ 10. All eligible real estate under MACRS is permitted a full month of cost recovery in the month of disposition. ____ 11. Motel buildings are classified as residential rental real estate. ____ 12. Taxpayers may elect to use the straight-line method under MACRS for personality. ____ 13. The cost recovery period for new farm equipment placed in service during 2010 is seven years. ____ 14. In a farming business, MACRS straight-line cost recovery is required for all fruit bearing trees. ____ 15. In a farming business, if an election is made to not have the uniform capitalization rules apply, cost is re- covered using the ADS straight-line method. ____ 16. When lessor owned leasehold improvements are abandoned because of the termination of the lease, a loss can be taken for the unrecovered basis. ____ 17. The costs of leasehold improvements owned by the lessee on residential rental real estate are recovered over a 27.5-year MACRS recovery period. ____ 18. For all property placed in service in 2010, the § 179 maximum deduction is limited to $250,000.
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____ 19. Any § 179 expense amount that is carried forward is subject to the business income limitation in the carryfor- ward year. ____ 20. Taxable income for purposes of § 179 limited expensing is computed without regard to MACRS. ____ 21. The basis of property for cost recovery is reduced by the § 179 amount that is disallowed because of the busi- ness income limitation. ____ 22. Property used for the production of income is not eligible for § 179 expensing. ____ 23.
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This note was uploaded on 04/15/2011 for the course ACCT 305 taught by Professor Allen during the Spring '11 term at Wilmington DE.

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mega sample test questions - ch 8 - Mega sample test...

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