mile 23

Question 1

what is qualified property for section 179 and bonus depreciation?

Answer 1

personal property
qualified improvements

Question 2

what is the allowance phase out threshold for a section 179 expense?

Answer 2

2,700,000

Question 3

method of depreciation and MACRS convention for:

personal property
real property

Answer 3

DDB, half year convention, mid quarter convention
straight line, mid month convention

Question 4

depreciable life for light trucks, autos, and computers

Answer 4

5 years

Question 5

depreciable life for office furniture, equipment, and machinery

Answer 5

7 years

Question 6

depreciable life for qualified improvements (security system)

Answer 6

15 years

Question 7

life insurance premium expense for an officer (how is this reconciled on book tax differences)

Answer 7

expensed on books, but not on tax return
need to add back

the expense cannot be deducted, only the proceeds

Question 8

when does attachment and perfection occur simultaneously?

Answer 8

when the creditor takes possession of the collateral in exchange for value

Question 9

if the goods are not transported, the risk of loss transfers for a
merchant seller
non-merchant seller

Answer 9

buyer receives the goods
tender of delivery

Question 10

what are the 4 proofs required to sue a merchant due to an injury from purchase of its goods?

Answer 10

1. the defendant was in the business of selling the product
2. the defendant sold the product in a defective condition
3. the product was unreasonably dangerous
4. use of the product caused injury

Question 11

when will creditors prevail in an involuntary bankruptcy petition?

Answer 11

when the company is insolvent → current liabilities exceed current assets, and debts cannot be paid as they become due

Question 12

what is the factor for creditors when the collateral is:
- inventory
- equipment

Answer 12

inventory → first to perfect
equipment → first to attach

Question 13

who can file for a BK under chapter
12
13

Answer 13

farmers
individuals

Question 14

how are distributions from a C corp made for
current e&p
accumulated e&p

Answer 14

pro rata
chronologically

Question 15

mechanic’s lien vs artisan’s lien

Answer 15

real property collateral vs personal property collateral

Question 16

what is writ of garnishment?

Answer 16

wages as collateral

Question 17

what is the american opportunity credit?

Answer 17

$2,500 limit

100% of the first $2,000 expenses
25% of the next $2,000 expenses

Question 18

what is the lifetime learning credit?

Answer 18

$2,000 limit
20% of up to $10,000 educational expenses

Question 19

what is the exception to sale of goods greater than $500 under the statute of frauds?

Answer 19

specially manufactured goods
written confirmation
admission into court
performance

Question 20

when can business meals be deducted?

Answer 20

when they are reimbursed

Question 21

what is accord and satisfaction?

Answer 21

creation of new contract where fulfillment (satisfaction) of it will discharge the old contract

Question 22

what is the fine for a failure to file for tax preparers?

Answer 22

$55 for each failure with a max of $28,000 per year

Question 23

what types of failures could tax preparers be fined for?

Answer 23

• failure to provide client a copy of the tax records
• failure to retain a copy of tax return
• signing the tax return