9) 9) Under what circumstances might a taxpayer elect the alternative depreciation system for new equipment acquired this year? A) A taxpayer is undertaking a major R&E project which will result in an usually low marginal tax rate for the next few years. B) A taxpayer has significant charitable contribution carryovers that will expire after this year. C) A taxpayer has significant NOL carryovers. D) All of the above 10) 10) In February 2021, Pietra acquired a new car costing $82,000. She used the car 80% in her sole proprietorship. Assuming Sec. 179 is not elected, Pietra's maximum depreciation deduction allowable for the car will be A) $14,480 B) $8,080. C) $13,120. D) $65,600. 11) 11) Terra Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that costs $1,190,000 on April 27, 2021. It was placed in service early in the year and was the only addition this year. Terra elects to depreciate the maximum under Sec. 179 and does not apply bonus depreciation. Terra's taxable income for the year before the Sec. 179 deduction is $1,700,000. What is Terra's total depreciation deduction related to this property? A) $1,190,000 B) $168,622 C) $1,050,000 D) $1,070,006 12) 12) In April 2021, Emma acquired a machine for $60,000 for use in her business. The machine is classified as 7-year property. Emma does not expense the asset under Sec. 179 or bonus depreciation. Emma's depreciation on the machine for 2021 is A) $60,000. B) $8,574. C) $6,428. D) $30,000 13) 13) Which of the following partnerships can use the cash method of accounting? A) a CPA firm with average revenues of $30 million B) a chocolate manufacturer with average revenues of $30 million C) Both of the partnerships can elect the cash method of accounting. D) Neither of the partnerships can elect the cash method of accounting. 14) 14) This year, John purchased property from William by assuming an existing mortgage of $40,000 and agreed to pay an additional $60,000, plus interest, in the 3 years following the year of sale (i.e., $20,000 annual payments for three years, plus interest). William had an adjusted basis of $44,000 in the building. What are the sales price and the contract price in this transaction? A) Sales Price Contract Price B) Sales Price Contract Price $100,000 $100,000 $100,000 $60,000 C) Sales Price $40,000 Contract Price $60,000 D) Sales Price $100,000 Contract Price $40,000