1. The monthly penalty for failing to file a timely tax return is less severe than the monthly penalty for late payment of taxes.

a) True, why? b) False, why?

2. Employers with more than 10 full-time equivalents (FTE) employees must reduce their small employer health insurance credit by 4% for each FTE employee over 10.

a) True, why? b) False, why?

3. Residential realty costing $100,000 is placed in service in 2000. MACRS for 2012 (take note 2012) is: A) $2,500. B) $2,564. C) $3,175. D) $3,636. E) $14,286. Please explain the answer.