Questions from General Taxation

Q: Juan, a sole proprietor, acquires a new 5-year

Juan, a sole proprietor, acquires a new 5-year class asset on March 14, 2015, for $200,000. This is the only asset Juan acquired during the year. He does not elect immediate expensing under § 179. Jua...

Q: Each Saturday morning, Ted makes the rounds of the local yard

Each Saturday morning, Ted makes the rounds of the local yard sales. He has developed a keen eye for bargains, but he cannot use all of the items he thinks are “real bargains.” Ted has found a way to...

Q: Debra acquired the following new assets during 2015. /

Debra acquired the following new assets during 2015. Determine Debra’s cost recovery deductions for the current year. Debra does not elect immediate expensing under § 179...

Q: On May 5, 2015, Christy purchased and placed in service

On May 5, 2015, Christy purchased and placed in service a hotel. The hotel cost $10.8 million. Calculate Christy’s cost recovery deductions for 2015 and for 2025.

Q: Janice acquired an apartment building on June 4, 2015, for

Janice acquired an apartment building on June 4, 2015, for $1.6 million. The value of the land is $300,000. Janice sold the apartment building on November 29, 2021. a. Determine Janice’s cost recover...

Q: During March 2015, Sam constructed new agricultural fences on his farm

During March 2015, Sam constructed new agricultural fences on his farm. The cost of the fencing was $80,000. Sam does not elect immediate expensing under § 179 and he does not claim any available addi...

Q: Lori, who is single, purchased 5-year class property

Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $400,000 on May 20, 2015. Lori expects the taxable income derived from her business (without regard to t...

Q: Olga is the proprietor of a small business. In 2015,

Olga is the proprietor of a small business. In 2015, the business’s income, before consideration of any cost recovery or § 179 deduction, is $250,000. Olga spends $600,000 on new 7-year class assets a...

Q: Jabari Johnson is considering acquiring an automobile at the beginning of 2015

Jabari Johnson is considering acquiring an automobile at the beginning of 2015 that he will use 100% of the time as a taxi. The purchase price of the automobile is $35,000. Johnson has heard of cost r...

Q: On October 15, 2015, Jon purchased and placed in service

On October 15, 2015, Jon purchased and placed in service a used car. The purchase price was $25,000. This was the only business-use asset Jon acquired in 2015. He used the car 80% of the time for busi...