Topic 6 Depreciation, Cost Recovery, Amortization, and Depletion

Question 1

Cost Recovery (depreciation) for tax purposes is done under _____.

Answer 1

MACRS (modified accelerated cost recovery system)

Question 2

Cost recovery for tax purposes, the ___________ life is determined by the ______ system.

Answer 2

depreciable

MACRS

Question 3

What is the recovery period for the following types of assets:

• office furniture, fixtures, and equipment
• computers and personal equipment (ie printers)
• light purpose trucks and cars

Answer 3

7y-office furniture, fixtures, and equipment
5y-computers and personal equipment (ie printers)
5y-light purpose trucks and cars

Question 4

Half-year MACRS conventions deduct ___ year of depreciation __________ of when asset was actually placed in service.

Answer 4

1/2 year; regardless

Question 5

Mid-quarter MACRS conventions applies when more than __% of total property placed in service in __th quarter. Deduct depreciation as if asset was placed in ______ of quarter that asset was actually placed in service.

Answer 5

40%; 4th; middle