33. Which of the following assets is NOT generally considered a capital asset?

A)

Ken owns a personal residence.

B)

Drake owns U.S. government securities that he is holding as an investment.

C)

Rosie bought a personal auto earlier this year.

D)

Darren bought a computer to use in his business.

34. Two years ago, Raul purchased a parcel of raw land on which he could construct a new building for his hardware business. He paid $60,000 for the land and incurred $800 in legal fees associated with the title search. He also paid an attorney $2,000 to draft the contract for the purchase of the land. Property taxes on the land have totaled $1,200 annually. What is Raul's adjusted basis in the land?

A)

$60,000

B)

$60,800

C)

$65,200

D)

$62,800

35. Margaret purchased a used pickup truck at a cost of $12,400, with sales tax of $600, to use in her floral business. She purchased the pickup (five-year property) and placed it in service on June 1 of the current tax year.

Assuming Margaret opts out of bonus depreciation, using MACRS, what is the first-year cost recovery deduction that Margaret can claim?

If the Recovery Year Is:	And the Recovery Period Is:
	3-Years	5-Year	7-Year	10-Year	15-Year	20-Year
	The Depreciation Rate Is:
1	33.33	20.00	14.29	10.00	5.00	3.750
2	44.45	32.00	24.49	18.00	9.50	7.219
3	14.81	19.20	17.49	14.40	8.55	6.677
4	7.41	11.52	12.49	11.52	7.70	6.177
5		11.52	8.93	9.22	6.93	5.713
6		5.76	8.92	7.37	6.23	5.285
7			8.93	6.55	5.90	4.888
8			4.46	6.55	5.90	4.522
9				6.56	5.91	4.462
10				6.55	5.90	4.461
11				3.28	5.91	4.462
12					5.90	4.461
13					5.91	4.462
14					5.90	4.461
15					5.91	4.462
16					2.95	4.461
17						4.462
18						4.461
19						4.462
20						4.461
21						2.231

A)

$1,240

B)

$2,600

C)

$5,200

D)

$1,300

36. Maria purchased manufacturing equipment several years ago at a cost of $16,000 to use in her business. She claimed $9,716 of cost recovery deductions. She sold the equipment for $8,000. What is the amount and character of the gain or loss resulting from this disposition?

A)

$9,716 ordinary income

B)

$8,000 ordinary loss

C)

$8,000 capital loss

D)

$1,716 of ordinary income, $0 long-term capital gain