TRUE OR FALSE QUESTIONS

1. The ordinary, necessary, and reasonable expenses of a cocaine dealer are deductible. TRUE OR FALSE

2.A taxpayer wins the third place prize of $20 in a raffle. The income is excluded from gross income since it is less than $25. TRUE OR FALSE

4. The percentage depletion deduction is allowed even though the entire cost of the asset has been recovered (i.e., the basis of the asset is zero). TRUE OR FALSE

9.The percentage depletion deduction is allowed even though the entire cost of the asset has been recovered (i.e., the basis of the asset is zero). TRUE OR FALSE

10. In computing depreciation using MACRS, a taxpayer who elects to expense all or a portion of an asset must also reduce the basis of the asset by the same amount. TRUE OR FALSE

12. A taxpayer who leases an automobile for business purposes will be allowed to deduct the lease payments, but may have to include an imputed amount in income. TRUE OR FALSE