2A. Aaron has a successful business with $50,000 of income in 2020. He purchased a new 7-year MACRS property with a cost of $7,000. For tax purposes, what cost recovery will provide the largest amount Aaron can deduct in 2020 for the new asset?

Section 179 immediate expensing

MACRS, bonus, and Section 179 will all result in an equal amount

Typical MACRS depreciation

Bonus depreciation

Bonus and Section 179 will result in an equal amount

2B. Aaron acquired raw land as an investment 16 years ago. The land cost $60,000. In the current year, the land is sold for a total sales price of $120,000, consisting of $10,000 cash and the buyer's note for $110,000. If Aaron elects to recognize the entire gain in the year of sale, what is his recognized gain in the current year?

$100,000

$60,000

None of the above

$50,000

$110,000

3. Taxpayers choosing the Section 179 election to expense:

May not carry over any amounts elected which are not allowed because of taxable income limitations.

Will have the maximum that can be expensed under the election reduced by $0.50 for each dollar by which the cost of the asset acquired exceeds a specified limit.

May expense a $125,000 automobile so long as it is used 100 percent for business.

May depreciate the amount of the asset cost that exceeds the amount allowed under the election to expense.