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Unformatted text preview: he last quarter of the taxable year, the corporation must use the mid-quarter
convention for MACRS depreciation purposes. With this method the acquisitions are segregated by
quarter and treated as if placed in service in the middle of each respective quarter. 6
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 CPA-02045 Type1 M/C A-D Corr Ans: D PM#21 R 3-01 13. CPA-02045 ARE Nov 95 #2 Page 6
Lake Corp., an accrual-basis calendar year corporation, had the following 1994 receipts:
1995 advanced rental payments where the lease ends in 1996
Lease cancellation payment from a 5-year lease tenant $125,000
50,000 Lake had no restrictions on the use of the advanced rental payments and renders no services. What
amount of income should Lake report on its 1994 tax return?
Choice "d" is correct. Assuming these were Lake's only transactions for the year, its taxable in...
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