Regulation 3 PassMaster Questions

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Unformatted text preview: x liability as 35% of that amount. [$95,000 - $40,000 = $55,000; $55,000 * 35% = $19,250] Supplemental Questions CPA-02194 Type1 M/C 95. CPA-02194 Nov 90 II #28 A-D Corr Ans: B PM#1 R 3-99 Page 29 Joe Hall owns a limousine for use in his personal service business of transporting passengers to airports. The limousine's adjusted basis is $40,000. In addition, Hall owns his personal residence and furnishings, that together cost him $280,000. Hall's capital assets amount to: a. b. c. d. $320,000 $280,000 $40,000 $0 CPA-02194 Explanation Choice "b" is correct. $280,000 is Hall's "capital assets." Choices "a" and "c" are incorrect. Hall's limousine used in his trade or business is considered a Section 1231 asset. Section 1231 assets are not considered capital assets. Choice "d" is incorrect. Hall's personal residence and personal furnishings are considered capital assets. CPA-02195 Type1 M/C 96. CPA-02195 May 91 II #50 A-D Corr Ans: B PM#2 R 3-99 Page 26 Under the modified accelerated cost recovery system (MACRS) of depreciation for property placed in service after 1986: a. b. c. d. Used tangible depreciable property is excluded from the computation. Salvage value is ignored for purposes of computing the MACRS deduction. No type of straight-line depreciation is allowable. The recovery period for depreciable r...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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