Question Number Two

Ten independent multiple choice questions appear below. You must answer all of them.

Do not assume that a taxpayer makes an IRC $179$ election or uses bonus depreciation unless a problem so states.

For each question you answer, insert in the appropriate space on the separate answer sheet the letter which indicates the correct response. Please note than all final answers have been rounded to the nearest $$10.$

Calendar year Corp. A purchases and places in service a five$-$year asset costing $$40,000$ on February $23,202.$ Corp. A estimates that the salvage value is $$6,000.$ Assume that the mid quarter convention applies to all five$-$year property placed in service during $202.$ What depreciation deduction will Corp. A claim for $202?$

A$.$ $$5,720$

B$.,14,000$

C$.8,750$

D$.11,900$

E$.$ None of the above

Taxpayer sells an asset for $$200,000.$ Assume Taxpayer has owned the asset for several years, the original cost was $$150,000,$ and Taxpayer has claimed total depreciation deductions of $$90,000.$ Assume also that Taxpayer incorrectly computed depreciation over the years and should have claimed depreciation deductions of $$110,000.$ Assuming that Taxpayer will not file amended returns to correct any prior depreciation errors, how should the Taxpayer report the sale?

A Gain of $$140,000$ and itemized deduction of $$10,000$

B Gain of $$140,000$ and itemized deduction of $$20,000$

C Gain of $$140,000$

D Gain of $$160,000$

E None of the above

During $202,$ calendar year Corp. A purchases and places in service office furniture costing $$10,000,$ machinery costing $$90,000,$ computers costing $$12,000,$ and an office building costing $$1,060,000,$ $$100,000$ of which is allocated to land. These are the only acquisitions of depreciable property acquired during the year. What is the maximum Code Sec. $179$ deduction available for $202?$

$\backslash$table$[[$A$.,$$$102,000$