1.Ramona purchases an acre of real estate for $20,000,000. The real estate purchase includes the following assets and their corresponding fair market value:

. Land: $12,000,000

. Building: $9,000,00

. Gazebo: $9,000,000

Determine the amount of Ramona's initial basis for the building

a.$6,000,000

b.$9,000,000

c.$15,000,000

d.$20,000,000

2.Which one of the following assets can a code section 179 deduction be used for?

a.A $300,000 plot of land owned by Z corporation.

b.A building that serves as the headquarters of Sarah's Cake Factory.

c.A $50,000 dump truck purchases by Dave's Dirt Removal Service.

d.A $20,000 personal use automobile purchased by Sam.

3.On April 2, 2015, Mona purchased a Sapphire necklace for $10,000. On June 20,2020 Mona gives the necklace to her daughter Diana, as a birthday present when the fair market value of the necklace is $20,000. Diana sells the necklace to a friend for $15,000 on July 5, 2020. What are the tax consequences for Diana?

a.Diana has a short-term gain of $5,000

b.Diana has a short-term gain of $10,000

c.Diana has a long-term gain of $5,000

d.Diana has a long-term gain of $10,000

4.Susie gave her granddaughter, Laura, some ABZ Co. stock last year when its fair market value was $25,000. Susie acquired the stock in 2010 at a cost of $35,000. Laura sold the ABZ Co. stock this year for $32,000. What are the tax consequences for Laura this year?

a.No income or loss

b.Loss of (3,000)

c.Gain of 3,000

d.Gain of $10,000

5.Sonya inherits shares of Big Red Airline Corporation stock from the estate of her uncle Tony. Tony purchased the stock for $3,000 on August 2, 2020. Tony died on August 4, 2020. The stock's fair market on August 4, 2020, is $2,000. Sonya sells the shares for $2,300 on December 8, 2020. What are the tax consequences for Sonya?

a.Sonya has a short-term loss of ($700)

b.Sonya has a short-term gain of $300

c.Sonya has a long-term loss of ($700)

d.Sonya has a long-term gain of 300

6.Adam owns land that he purchased for $30,000 in 2015. After using it personally for two years, he converts the land to business use when the land's fair market value is $15,000. He then, sells the land for $42,000 the next year. What is Adam's recognized gain or loss on the land?

a.No gain no loss

b.$12,000 gain

c.$27,000

d.$32,000

7.On July 17, 2019, Elise purchases office furniture (7-year property) costing $1,045,000 for use in her business. She wishes to use the section 179 election. Her taxable income before the depreciation deduction is $10,000,000, and this is the only property purchases during the year. What is the maximum total cost recovery (including 179) Elise can take for the furniture in 2019? (Round to the nearest dollar)

a.$3,000

b.$75,023

c.$1,020,000

d.1,023,573

8.Piper production, Inc. purchases a new high-volume paper shredder for use in their document management department for $20,000 on November 7, 2019, during the last quarter of the year. It was the only piece of depreciable property placed in service during 2019. The paper shredder is 7-year MACRS property, the section 179 election expense was not exercised. What is piper's 2019 depreciation deduction on the paper shredder?

a.$714

b.$2,498

c.$2,812

d.$2,980

9.Yolanda pays $170,000 for an office building including the land on August 27,2019, to use in her consulting business. She properly allocates $150,000 of the basis to the building and $20,000 to the land. What is Yolanda's 2019 depreciation deduction on the property? Round to the nearest dollar

a.$1,124

b.$1,1445

c.$3,846

d.$5,454