1. Which of the following is true about corporate capital losses?

A. You can deduct up to $3,000 and carryover the rest

B. Any excess losses get carried forward indefinitely

C. You can deduct up to $3,000 but only for long-term losses

D. Any excess losses can be carried back 3 years

2. Malena purchases an old refrigerator for her yogurt shop at a cost of $20,000 in 2015 that she figures will last another 5 years. Assuming the IRS tells you the fridge has a 7 year tax life, what is the most possible cost recovery deductions Malena can take in 2015 and 2016?

A. $11,429 and $2,449

B. $2,858 and $4,898

C. $4,000 and $6,400

D. $12,000 and $3,200

3. Stefan purchases a new asset for his profitable business in 2009 costing $850,000. This is the only asset Stefan purchases during the year. What will be the basis subject to MACRS depreciation?

A. 850,000

B. 425,000

C. 325,000

D. 300,000

4. In December 2016, Ann was lucky enough to be in the audience of the Ellen show when everyone in the audience was given a brand new car worth $24,000 retail value. Ann uses public transportation because she thinks all other drivers are crazy people, so she does not need the car but accepts it anyway. She gives it to her friend Art who does drive but already has two cars. Art then sells the car for $22,000 in cash on December 20, 2016, and splits the proceeds with Ann. How much taxable income do Ann and Art each have from the car transactions?

A. 0 and 22,000

B. 11,000 and 11,000

C. 24,000 and 22,000

D. 24,000 and 0

5. Jonathon is a manager at a local car dealer. One of the perks is being able to buy new cars for personal use at a discount. He pays $30,000 for a new SUV that has a retail price of $51,000. His dealership paid $38,000 for the SUV earlier in the year. What will be Jonathons basis in the SUV?

A. 43,000

B. 51,000

C. 30,000

D. 38,000