TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 8) Most taxpayers currently elect to expense R&E expenditures because of the immediate tax benefit. 8) 9) A taxpayer owns an economic interest in an oil and gas property. She is allowed to deduct the smaller of cost depletion or percentage depletion. 9) 10) 10) A taxpayer makes capital improvements to the real property used in her business. The taxpayer must depreciate the improvements over the remaining life of the property on which the improvements were made. 11) 11) Many taxpayers use the LIFO method of inventory valuation because during inflationary periods, LIFO normally results in the lowest valuation of ending inventory and, hence, the lowest taxable income. 12) Points paid on a mortgage to buy a personal residence are generally deductible in the year paid. 12) 13) Alvin, a practicing attorney who also owns an office supplies store, may use the cash basis for his legal practice and the accrual basis for his office supplies store. 13) 14) 14) Owners of pass-through entities may defer income recognition by selecting a different tax year for the business if at least 25% of the business revenues occur during the last two months of the proposed year