The Modified Accelerated Cost Recovery System (Macrs)

39 Questions | By Aerazan | Updated: Mar 21, 2022 | Attempts: 202

Questions

Settings

Create your own Quiz

Questions and Answers

1.

Tax cost recovery methods do not include:
- A.
  
  Amortization
- B.
  
  Depletion
- C.
  
  Caplitalization
- D.
  
  Depreciation
- E.
  
  All
2.

Which of the following is not depreciated?
- A.
  
  Automobile
- B.
  
  Building
- C.
  
  Patent
- D.
  
  Machinery
- E.
  
  All
3.

Which of the following is not usually included in an asset's tax basis?
- A.
  
  Purchase Price
- B.
  
  Sales Tax
- C.
  
  Shipping
- D.
  
  Installation Costs
- E.
  
  All
4.

Which of the following would be considered an improvement rather than a routine maintenance?
- A.
  
  Oil Change
- B.
  
  Engine Overhaul
- C.
  
  Wiper blade replacement
- D.
  
  Air filter change
5.

Tax depreciation is currently calculated under what system?
- A.
  
  Sum of the years digits
- B.
  
  Accelerated cost recovery system
- C.
  
  Modified accelerated cost recovery system
- D.
  
  Straight line system
- E.
  
  None
6.

Which is not an allowable method under MACRS?
- A.
  
  150 percent declining balance
- B.
  
  200 percent declining balance
- C.
  
  Straight line
- D.
  
  Sum of the years digits
- E.
  
  All
7.

Which of the allowable methods allows the most accelerated depreciation?
- A.
  
  150 percent declining balance
- B.
  
  200 percent declining balance
- C.
  
  Straight line
- D.
  
  Sum of the years
- E.
  
  None
8.

How is the recovery period of an asset determined?
- A.
  
  Estimated useful life
- B.
  
  Treasury regulation
- C.
  
  Revenue procedure 87-56
- D.
  
  Revenue ruling 87-56
- E.
  
  None
9.

Which of the following depreciation conventions are not used under MACRS?
- A.
  
  Full month
- B.
  
  Half year
- C.
  
  Mid month
- D.
  
  Mid quarter
- E.
  
  All
10.

Which depreciation convention is the general rule for tangible personal property?
- A.
  
  Full month
- B.
  
  Half year
- C.
  
  Mid month
- D.
  
  Mid quarter
- E.
  
  None
11.

The MACRS recovery period for automobiles and computers is:
- A.
  
  3 years
- B.
  
  5 years
- C.
  
  7 years
- D.
  
  10 years
12.

Lax, LLC purchased only one asset during the current year. It placed in service computer equipment (5- year property) on August 26 with a basis of $20,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation):
- A.
  
  2000
- B.
  
  2858
- C.
  
  3000
- D.
  
  4000
13.

Sairra, LLC purchased only one asset during the current year. It placed in service furniture (7-year property) on April 16 with a basis of $25,000. Calculate the maximum depreciation expense for the current year, rounding to a whole number (ignoring §179 and bonus depreciation):
- A.
  
  1786
- B.
  
  3573
- C.
  
  4463
- D.
  
  5000
14.

Beth's business purchased only one asset during the current year. It placed in service machinery (7-year property) on December 1 with a basis of $50,000. Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation):
- A.
  
  1785
- B.
  
  2500
- C.
  
  7145
- D.
  
  10000
15.

Deirdre's business purchased two assets during the current year. It placed in service computer equipment (5-year property) on January 20 with a basis of $15,000 and machinery (7-year property) on October 1 with a basis of $15,000. Calculate the maximum depreciation expense, rounded to a whole number (ignoring §179 and bonus depreciation):
- A.
  
  1286
- B.
  
  5144
- C.
  
  5786
- D.
  
  6000
16.

Suvi, Inc. purchased two assets during the current year. It placed in service computer equipment (5-year property) on August 10 with a basis of $20,000 and machinery (7-year property) on November 18 with a basis of $10,000. Calculate the maximum depreciation expense, rounded to a whole number (ignoring §179 and bonus depreciation):
- A.
  
  857
- B.
  
  3357
- C.
  
  5429
- D.
  
  6000
17.

Wheeler LLC purchased two assets during the current year. It placed in service computer equipment (5- year property) on November 16 with a basis of $15,000 and furniture (7-year property) on April 20 with a basis of $11,000. Calculate the maximum depreciation expense, rounding to a whole number (ignoring §179 and bonus depreciation):
- A.
  
  1285
- B.
  
  2714
- C.
  
  4572
- D.
  
  5200
18.

Tasha LLC purchased furniture (7-year property) on April 20 with a basis of $20,000 and used the midquarter convention. During the current year, which is the fourth year Tasha LLC owned the property, the property was disposed of on December 15. Calculate the maximum depreciation expense, rounding to a whole number:
- A.
  
  898
- B.
  
  2095
- C.
  
  2461
- D.
  
  2394
19.

Anne LLC purchased computer equipment (5-year property) on August 29 with a basis of $30,000 and used the half-year convention. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense:
- A.
  
  432
- B.
  
  1728
- C.
  
  1874
- D.
  
  3456
20.

Poplock LLC purchased a warehouse and land during the current year for $350,000. The purchase price was allocated as follows: $275,000 to the building and $75,000 to the land. The property was placed in service on August 12. Calculate Poplock's maximum depreciation for this first year, rounded to the nearest whole number:
- A.
  
  2648
- B.
  
  3371
- C.
  
  3751
- D.
  
  4774
21.

Tom Tom LLC purchased a rental house and land during the current year for $150,000. The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land. The property was placed in service on May 22. Calculate Tom Tom's maximum depreciation for this first year:
- A.
  
  1605
- B.
  
  2273
- C.
  
  2408
- D.
  
  3410
22.

Simmons LLC purchased an office building and land several years ago for $250,000. The purchase price was allocated as follows: $200,000 to the building and $50,000 to the land. The property was placed in service on October 2. If the property is disposed of on February 27 during the 10th year, calculate Simmons' maximum depreciation in the 10th year:
- A.
  
  641
- B.
  
  909
- C.
  
  5128
- D.
  
  7346
23.

Lenter LLC placed in service on April 29, 2013 machinery and equipment (7-year property) with a basis of $600,000. Assume that Lenter has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including section 179 expensing (but ignoring bonus expensing):
- A.
  
  85740
- B.
  
  120000
- C.
  
  514290
- D.
  
  585740
24.

Littman LLC placed in service on July 29, 2013 machinery and equipment (7-year property) with a basis of $600,000. Littman's income for the current year before expensing was $100,000. Calculate the maximum depreciation expense including section 179 expensing (but ignoring bonus expensing):
- A.
  
  0
- B.
  
  85740
- C.
  
  142870
- D.
  
  171450
25.

Crouch LLC placed in service on May 19, 2013 machinery and equipment (7-year property) with a basis of $2,200,000. Assume that Crouch has sufficient income to avoid any limitations. Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing):
- A.
  
  314380
- B.
  
  440000
- C.
  
  571510
- D.
  
  742930