Question 1

Rick purchased a uranium interest for $10,000,000 on January 3,2015,when recoverable reserves were estimated at 200,000 units.A total of 10,000 units were extracted in 2015 and 7,000 units were sold in 2015.Gross income from the property was $2,800,000 and taxable income without the allowance for depletion was $1,000,000.Determine the depletion deduction for 2015.

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Question 2

Discuss the reason for the inclusion amount with respect to leased automobiles.

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Question 3

In 2015,Marci is considering starting a new business.Marci incurs the following costs associated with this venture. Advertising $ 5,000 Travel 10,000 Market surveys 8,000 Professional services 30,000 Interest expense 2,000 Taxes 1,000 Marci started the new business on January 5,2016.Determine the deduction for Marci's startup costs for 2015.

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Question 4

Discuss the difference between the half-year convention and the mid-quarter convention.

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Question 5

Discuss the beneficial tax consequences of an SUV not being classified as a passenger automobile.

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Question 6

Discuss the tax consequences of listed property being used for the production of income compared to being used in a trade or business.

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Question 7

Discuss the tax implications of a seller allocating the selling price to goodwill or a covenant not to compete.

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Question 8

Norm purchases a new sports utility vehicle (SUV) on October 12,2015,for $60,000.The SUV has a gross vehicle weight of 6,200 lbs.It is used 100% of the time for business and it is the only business asset acquired by Norm during 2015.Compute the maximum deduction with respect to the SUV for 2015.Norm does not take additional first-year depreciation (if available).

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Question 9

Discuss the requirements in order for startup expenditures to be amortized under § 195.

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Question 10

Discuss the criteria used to determine whether a building is residential or nonresidential realty.Also explain the tax consequences resulting from this determination if the property is placed in service in 2015.

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Question 11

Discuss the effect on the cost recovery method of a taxpayer election if the uniform capitalization rules apply to a farming business.

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Question 12

On June 1,2015,Gabriella purchased a computer and peripheral equipment (five-year property) for $25,000.She used the assets 40% for business,50% for the production of income,and 10% for personal use.These are the only assets Gabriella purchased during the current year.Determine her total cost recovery deduction for the current year.

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Quiz 8: Depreciation, cost Recovery, amortization, and Depletion