Depreciation

Question 1

MACRS Property

The 3-Year Class includes:

Answer 1

Special tools and certain racehorses

Question 2

MACRS Property

The 5-Year Class includes:

Answer 2

Cars, computers, copiers, and trucks

Question 3

MACRS Property

The 7-Year Class includes:

Answer 3

Furniture, fixtures, machinery, and equipment

Question 4

MACRS Property

The 10-Year Class includes:

Answer 4

Boats and water transportation equipment

Question 5

MACRS Property

The 15-Year Class includes:

Answer 5

Qualified improvements to nonresidential buildings

Question 6

MACRS Property

The 20-Year Class includes:

Answer 6

Farm buildings and municpal sewers

Question 7

Section 179 Depreciation Rules

What is the maximum allowable deduction?

Answer 7

$1,220,000

Question 8

What is the phase-out amount?

Answer 8

$3,050,000

When qualifying expenses exceed this amount, you must calculate the amount over $3,050,000 - $X. Then, reduce the maximum allowable deduction ($1,220,000) by the excess.

Question 9

True or false

You can use the Section 179 Deduction when there is already a loss or if it creates a loss

Answer 9

False

Question 10

You can’t use the Section 179 Deduction if property was acquired through a related party.

Answer 10

True

Question 11

You can’t use the Section 179 Deduction to depreciate land

Answer 11

True

Question 12

Nonresidential property qualify to use the Section 179 Deduction

Answer 12

False

Improvements qualify

Question 13

Which MACRS Classes use the Double Declining Balance (DDB)

Answer 13

The 3-Year Class, 5-Year Class, 7-Year Class, 10-Year Class, and 15-Year Class