Depreciation and Sale of Business Property

What is the process of recording an expenditure for an item that provides benefits over a long period of time?

• Capitalization

• Depreciation

• Amortization

• Restoration

Which of the following requires capitalization?

• Fixing a material condition or defect that existed prior to acquisition of the property

• Making changes that allow the property to be used in a new or different manner

• Replacing a major component, substantial structural part, or combination of parts

• All of the above

What is the accounting process of allocating and deducting the cost of an asset over a period of years?

• Capitalization

• Depreciation

• Amortization

• Restoration

Which system allows taxpayers to write off an asset's cost over a designated period and use an accelerated method for depreciation?

• MACRS

• Bonus Depreciation

• Section 179

• Straight-line Depreciation

What is the recovery period for business furniture under MACRS?

• 5 years

• 7 years

• 10 years

• 15 years

Which convention provides for six months of depreciation during the year the asset is first acquired and six months during the year the asset is fully depreciated, sold, or disposed?

• Half-year convention

• Mid-quarter convention

• Mid-month convention

• Straight-line convention

What is the maximum annual amount that can be expensed under Section 179 in 2022?

• $1,080,000

• $1,000,800

• $1,800,000

• $1,070,000

Which type of property is subject to the luxury automobile limitation?

• Passenger automobiles under 6,000 pounds

• Trucks and buses

• Boats and airplanes

• All of the above

For Goodwill, how many years should this intangible asset be amortized?

• 5 yrs

• 15 yrs

• 1.5 yrs

• 27.5 yrs

How many years should you depreciate a single-family rental property?

• 275 yrs

• 39 yrs

• 20 yrs

• 27.5 yrs