Depreciation expense represents the portion of a property's cost written off each year because of wear and tear, deterioration, and normal obsolescence. True False QUESTION 4 Taxpayers leasing cars and other vehicles can: A. deduct 100% of their total vehicle lease costs. B. either use the standard mileage rate or deduct the business portion of their lease payments. C. deduct 50% of their total vehicle lease costs. D. not deduct any of their vehicle lease costs. QUESTION 5 The recovery period for nonresidential (commercial and industrial) real estate, such as office buildings, manufacturing plants, and warehouses, is 27.5 years if placed in service before May 13, 1993. True False QUESTION 6 The rst-year depreciation cap on a luxury passenger vehicle is increased by if bonus depreciation is claimed. A. $4,000 B. $6,000 c. $8,000 D. $10,000 QUESTION 7 Under MACRS (Modied Accelerated Cost Recovery System), personal property is assigned a regular recovery period of 3, 5, 7, 10, or 15 years, regardless of its actual useful life. True False QUESTION 8 Taxpayers can elect Section 179 expense: A. only in the year they place the section 179 property in service. B. one year after they place the section 179 property in service. C. six months after they place the section 179 property in service. D. three months after they place the section 179 property in service. QUESTION 9 The Alternative Depreciation System (ADS) period for nonresidential real property is : A. 39 years. B. 27.5 years. C. 31.5 years. D. 40 years