ACT 4494 Fixed Asset Assignment FA 21 Name ____________________________________________________________________________ 1. Explain the differences and similarities between personal property, real property, intangible property, and natural resources. Also, provide an example of each type of asset. 2. What is the difference in the recovery periods used by MACRS and those used under generally accepted accounting principles (GAAP)? 3. What are the two depreciation conventions that apply to tangible personal property under MACRS? Explain each. 4. What is Section 179? Explain the two limitations placed on the 179 deduction. How is Section 179 different from depreciation? 5. What is a 197 intangible? How do taxpayers recover the costs of these intangibles? 6. Michael purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Michael incurred the following expenses before using the van: shipping costs of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200 which included $3,000 of sales tax and a registration fee of $200; wash and detailing for $50; and an engine tune-up for $250. What is Michaels cost basis for the delivery van? Which of the costs above are immediately expensed as maintenance? Show all of your work.