1.
Assets utilized for more than ____________ generally must be capitalized and its cost is then recovered over the life of estimated life of that asset.
2.
The name of the cost recovery system depends on the type of business property capitalized:
1.Depreciation: ____________ property (e.g., equipment) and real property (e.g., buildings (not land))
3.
2. Amortization: ____________ assets (e.g., start-up costs, goodwill, etc.)
4.
3. .Depletion: ____________ resources (e.g., timber, coal, oil, gas, etc.)
5.
Basis of property is ____________ by cost recovered every year
A. 
B. 
C. 
D. 
6.
Adjusted basis (net book value) or Tax basis are terms for the amount of the asset’s cost that has yet to be recovered
7.
Which items are added to the cost on the date of acquiisition to calculate adjusted basis?
A. 
B. 
Cost of improvements (not routine repair or maintenence)
C. 
D. 
Deductible loss on destruction casulaties
E. 
Buying expenses including commissions, legal, title search, surveys and appraisal fees paid at date of original purchase
F. 
Capital gain on destruction casualties
8.
Minor or routine maintenance of capitalized assets are ____________ when incurred.
9.
Additional costs that significantly extend an asset’s useful life, the expenditure generates a new asset (for cost recovery purposes) separate from the original asset are not expensed.
10.
When multiple assets are purchased together at a “bargain price”, must allocate total cost according to the relative ____________ of each property.
11.
Assets such as building, land and personal-use assets are depreciable.
12.
If personal-use property is converted to business property, the initial basis of the property is the ____________ of:
1) Cost basis of the asset or
2) FMV of the asset at date of conversion to business use.
13.
The adjusted basis for assets acquired through nontaxable exchange is generally the ____________ basis as the property transferred
A. 
B. 
C. 
D. 
14.
Basis of property acquired by gift is generally the basis of the donor?
15.
Basis of property acquired by inheritance is generally the FMV at decedent’s ____________.
A. 
B. 
C. 
D. 
16.
Personal property refers to the physical nature of the property. It means that the property is immovable?
17.
Personal-use property refers to property held for the taxpayer's own enjoyment?
18.
Which property qualifies as real property?
A. 
B. 
C. 
D. 
E. 
F. 
19.
Which declining balance applies to 3-year, 5-year, 7-year and 10-year classes of property?
A. 
B. 
C. 
D. 
20.
Which declining balance applies to 15-year and 20-year classes of property.?
A. 
B. 
C. 
D. 
21.
Which declining balance applies to 27.5 & 39-year classes of property?
A. 
B. 
C. 
D. 
22.
You do not consider salvage value when calculating MACRS depreciation rates?
23.
The decision to use an accelerated method or SL applies to ____________ property
A. 
B. 
C. 
D. 
24.
You cannot change from SL to accelerated for future year's acquisitions once you choose a method?
25.
Which convention applies to PERSONAL property.
A. 
B. 
C. 
D.