Question 54 of 75. completed on April 20 and Aled put out a vacancy sign and began showing the property to prospective tenants that day. He received a signed lease from a new tenant Aled purchased a vacant rental house on January 18 of last year. He made some improvements before showing the property to potential tenants. The work was on August 28, and the tenant moved in on September 1. For depreciation purposes, what is the date Aled placed this rental property in service? 0000 January 18. April 20. August 28. September 1.

Question 54 of 75. completed on April 20 and Aled put out a vacancy sign and began showing the property to prospective tenants that day. He received a signed lease from a new tenant Aled purchased a vacant rental house on January 18 of last year. He made some improvements before showing the property to potential tenants. The work was on August 28, and the tenant moved in on September 1. For depreciation purposes, what is the date Aled placed this rental property in service? 0000 January 18. April 20. August 28. September 1.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 5MCQ: Which of the following statements with respect to the depreciation of property under MACRS is...

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Which of the following statements with respect to the depreciation of property under MACRS is incorrect? Under the half-year convention, one-half year of depreciation is allowed in the year the property is placed in service. If a taxpayer elects to use the straight-line method of depreciation for property in the 5 -year class, all other 5 -year class property acquired during the year must also be depreciated using the straight-line method. In some cases, when a taxpayer places a significant amount of property in service during the last quarter of the year, real property must be depreciated using a mid-quarter convention. Real property acquired after 1986 must be depreciated using the straight-line method. The cost of property to which the MACRS rate is applied is not reduced for estimated salvage value.
Is a deduction allowed under the MACRS rules for depreciable real estate (used in a business or held for investment) in the year the property is sold? If so, explain how it is calculated. O A. Yes, a deduction is allowed under the MACRS rules for depreciable real estate in the year the property is sold. It is assumed that the asset is held for the entire year. The amount of depreciation is computed by taking 100% of the annual depreciation. O B. No, there is no deduction allowed under the MACRS rules for depreciable real estate in the year the property is sold. O C. O D. Yes, a is deduction allowed under the MACRS rules for depreciable real estate in the year the property is sold. It is assumed that the asset is held for half the year. The amount of depreciation is computed by taking 6/12's of the annual depreciation. Yes, depreciation for real estate is computed using tables that follow the mid-month convention, so depreciation is allowed in the year of sale. The amount of…
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On November 10 of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,200,000; $300,000 was allocated to the basis of the land and the remaining $900,000 was allocated to the basis of the building. a) Assume the building was purchased and placed in service on March 3 instead of November 10. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3? b) Assume the building is residential property. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3?c) What would be the depreciation for 2022, 2023, and 2024 if the property were nonresidential property purchased and placed in service November 10, 2005 (assume the same original basis)?
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Line following information applies to the questions displayed below. At the beginning of the current year, Poplock began a calendar-year dog boarding business called Griff's Palace. Poplock bought and placed in service the following assets during the year: Asset Computer equipment Dog-grooming furniture Pickup truck Commercial building Land (one acre) Asset Computer equipment Dog-grooming furniture Pickup truck Date Acquired Cost Basis 3/23 5/12 9/17 10/11 10/11 Assuming Poplock does not elect 5179 expensing and elects not to use bonus depreciation, answer the following. questions: (Use MACRS Table 1. Table 2. Table 3. Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable. Commercial building Land (one acre) Total What is Poplock's year 1 depreciation deduction for each asset? $ $9,000 11,000 10,000 310,000 120,000 Depreciation Deduction
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