Mario sold an office building on july 1 2007 for

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Microeconomics: Private and Public Choice
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Chapter 11 / Exercise 13
Microeconomics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
Expert Verified
18. Mario sold an office building on July 1, 2007, for $180,000. He had purchased the building in 1980 for $150,000and had properly deducted $108,000 of depreciation, which included $15,500 in additional depreciation (acceleratedover straight line). What amount may Mario report as Sec. 1231 gain?A. $15,500B. $42,000C. $122,500D. $138,000
19. Which of the following is true about MACRS depreciation rules?
20. In 2013 Judy placed in service a machine that cost $2,020,000. Her annual business income limit is $55,000. If she placed no other Sec. 179 property in service during the year, what are the Sec. 179 amounts elected and deducted in 2013? Elected Deducted
21. Ben Green operates a parking lot that yielded net income of $13,000 during the current year. The only other transactions that Mr. Green had during the year were a gain of $16,000 on the sale of some Westinghouse Corporation stock that he bought 2 years ago, a loss of $10,000 on the sale of 1 acre of the land used in his parking lot business, and a gain of $4,000 on the sale of 1/2 acre of the land used in his parking lot business. All of the land used in his parking lot operations was purchased 7 years ago. Mr. Green’s net capital gain from sale or exchange of capital assets for the current year is
We have textbook solutions for you!
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Microeconomics: Private and Public Choice
The document you are viewing contains questions related to this textbook.
Chapter 11 / Exercise 13
Microeconomics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
Expert Verified
22. Which of the following is nota “trade or business” expense?a.Interest on business indebtedness.b.Property taxes on business property.c.Parking ticket paid on business auto.d.Depreciation on business property.e.All of the above are “trade or business” expenses.
23. ABC, Inc. is an accrualbasis taxpayer. ABC uses the aging approach to calculate the reserve for bad debts. During 2012, ABC estimated and added $35,000 to its bad debt reserve based on prior years’ collection experience. During 2012, customer accounts totaling $17,000 were identified as having become worthless due to their financial difficulties. What is ABC’s bad debt deduction for tax purposes?
24. Angela, a real estate broker, had the following income and expenses in her businessCommissions income$100,000Expenses:Commissions paid to non-brokers for referrals(illegal under state law and subject to criminal penalties)20,000Commissions paid to other real estate brokers for referrals(not illegal under state law)10,000Travel and transportation12,000Supplies4,000Office and phone5,000Parking tickets500How much netincome must Angela report from this business?

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