1 a)A taxpayer owns an automobile that is converted to business use five years after purchase. This asset is eligible for cost recovery deductions.

True/False

1 b)All of the following assets are eligible for cost recovery deductions, except:

a-Computer used in the taxpayers business

b-Farmland

c-Semi truck purchased for farm operation

d-Rental property building purchased by the taxpayer

1 c)Office furniture and fixtures would fall into which MACRS recovery period?

a-3 year

b-7 year

c-5 year

d-10 year

1 d) Joe owns a machine that originally cost $5000 that he has fully depreciated. He sells the machine for $2000. Which is true of the treatment of the gain on sale.

a-Joe will recognize a capital gain on the sale of the asset

b-Joe will recognize ordinary income on the sale due to recapture rules

c-None of the above.

d-Joe will recognize no gain on the sale of the asset

1 e) Residential real estate would fall into which MACRS recovery period?

a-39 year

b-15 year

c-27.5 year

d-10 year