Question
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
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
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