1. Oil and gas properties are entitled to a 15% statutory depletion allowance. Assume that Darlene purchased an oil reserve in the current year for $120,000 and it has 40,000 barrels of estimated reserves. Gross income from the reserve is $90,000 for the year. Taxable income from the reserve, before the depletion deduction, is $50,000. This year 6,000 barrels were extracted and sold. What is Darlene's depletion deduction for the year for tax purposes?

		$18,000
		$13,500
		$7,500
		$6,000
		$0

2. Leasing an automobile for business purposes may result in imputed income to the taxpayer.

True

False

3. On December 1 of Year 1, Jesusa, an accrual basis taxpayer, received $1,800 from a client for therapeutic massage services to be rendered during the next 18 months beginning in December. In December she performed $100 in services for the client. Assuming that she uses the deferral method, how much income must Jesusa report in Year 1?

		$0
		$100
		$1,200
		$1,700
		$1,800