51 terra corporation a calendar year taxpayer purchases and places into service mach 4313816

51 terra corporation a calendar year taxpayer purchases and places into service mach 4313816

51) Terra Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that cost $518,000. The mid-quarter convention does not apply, and the property is not eligible for bonus depreciation. Terra elects to depreciate the maximum under Sec. 179. Terra's taxable income for the year before the Sec. 179 deduction is $700,000. What is Terra's total depreciation deduction related to this property?

A) $74,022

B) $518,435

C) $500,000

D) $502,572

52) Tanya owns an unincorporated manufacturing business. In 2013, she purchases and places in service $2,020,000 of qualifying five-year equipment for use in her business. Her taxable income from the business before any Sec. 179 deduction is $461,000. Tanya elects to expense the maximum under Sec. 179. The asset is not eligible for bonus depreciation. What is Tanya's maximum total cost recovery deduction for 2013?

A) $788,000

B) $769,000

C) $480,000

D) $461,000

53) Which of the following statements regarding Sec. 179 is true?

A) If a taxpayer places in service property costing more than the Sec. 179 ceiling on the amount of property placed in service, the excess can be carried over to subsequent years.

B) Amounts of the Sec. 179 election in excess of the taxable income limitation are carried forward.

C) Sec. 179 carryforwards expire after five years.

D) All of the above statements are true.

54) Lunar Corporation purchased and placed in service new five-year MACRS equipment costing $700,000 on January 5, 2013.  Lunar is the original user of this equipment.  Assume Lunar had no other additions this year, has high taxable income and wishes to maximize the 2013 total cost recovery deduction.  How much can it deduct this year? 

A) $620,000

B) $350,000

C) $500,000

D) $140,000

55) In November 2013, Kendall purchases a computer for $4,000. She does not use Sec. 179 or bonus depreciation. She only uses the most accelerated depreciation method possible. The computer is the only personal property which she places in service during the year. What is her total depreciation deduction for 2013?

A) $200

B) $572

C) $800

D) $1,000

56) On October 2, 2013, Dave acquired and placed into service 5-year business equipment costing $70,000. No other acquisitions were made during the year. Dave does not use Sec. 179 or bonus depreciation. The depreciation for this year is using the most accelerated method possible is

A) $0.

B) $3,500.

C) $7,000.

D) $10,003.

57) On November 3, this year, Kerry acquired and placed into service 7-year business equipment costing $80,000. In addition, on May 5th of this year, Kerry had also placed in business use 5-year recovery property costing $15,000. Kerry did not elect Sec. 179 immediate expensing, and the assets are not eligible for bonus depreciation. No other assets were purchased during the year. The depreciation for this year is

A) $3,606.

B) $6,606.

C) $13,576.

D) $14,432.

58) Paul bought a computer for $15,000 for business use on March 18, 2011. This was his only purchase for that year. Paul used the most accelerated depreciation method available, but did not elect Sec. 179. Bonus depreciation was not available. Paul sells the machine in 2013. The depreciation on the computer for 2013 is

A) $0.

B) $1,440.

C) $1,500.

D) $2,880.

59) On April 12, 2012, Suzanne bought a computer for $20,000 for business use. This was the only purchase for that year. Suzanne used the most accelerated depreciation method available and did not use Sec. 179. Bonus depreciation was not available. Suzanne sells the machine in 2013. The depreciation on the computer for 2013 is

A) $2,000.

B) $3,200.

C) $4,000.

D) $6,400.

60) Harrison acquires $65,000 of 5-year property in June 2011 that is required to be depreciated using the mid-quarter convention (because of other purchases that year). He did not elect Sec. 179 immediate expensing. Bonus depreciation was not available. If Harrison sells the property on August 23, 2013, what is the amount of depreciation claimed in 2013?

A) $6,500.00

B) $7,312.50

C) $11,700.00

D) $9,289.00

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