14. Residential real property such as a three bedroom house costing $100,000 is placed in service on 7/1/2015. The MACRS MM depreciation for Year 2015 is:

a. $2,500.

b. $2,564.

c. $3,175.

d. $3,636.

e. $14,286.

15. Which of the following expenditures incurred on an apartment building is not currently deductible from rental income?

a. Repairs to the roof

b. Repainting the halls

c. Fixing leaky gutters

d. Installing a $5,000 chain link fence around a parking lot

e. All of the above are currently deductible

18. In order to meet the material participation test for a rental real estate activity, over what number of hours of personal service must the taxpayer must work in rental real estate during the year?

a. 100

b. 250

c. 500

d. 750

e. 1,000

III. WRITE THE LETTER OF THE BEST ANSWER IN THE SPACE PROVIDED.

(3 points for each question-show your work for partial credit).

20. Taxpayers who operate a business out of their home report the depreciation deduction for the use of the home office on ____________, and the depreciation deduction for the business equipment used in the home office is reported on ____________.

21. With respect to domestic travels, there is no need to allocate the costs of travelling to and from the destination if more than ____________ of the time gone is spent conducting business.

22. The MACRS basis of 5-year property is purchased on March 3, 2015 for $10,000. The company is using DDB and the half-year convention applies to personal property acquired in 2015. What is the depreciation expense on Form 4562 in Year 2 for 2015?

a. $2,000.

b. $1,000.

c. $1,600.

d. $3,200.

e. $2,800.

Show how you found the answer____________

23. If a taxpayer works a total of $1,800 hours during the year, the material participation test for rental real estate requires that more than ____________ of those hours be involved in rental real estate activities.