Reference no: EM131560133

1) Jeff purchased a van on March 1, 2016, for use in his business. The van was purchased for $30,000, has an estimated useful life of 10 years, and a salvage value of $2,000. No other assets were put into service that year. What is Jeff's MACRS depreciation on the van in 2016?

2) On March 1, 2016, Matt, an individual, sold an office building for $300,000 that had an adjusted basis of $220,000, resulting in an $80,000 gain. Matt had purchased the building for $260,000 on April 1,2015, and $30,000 of the total depreciation taken took advantage of a special tax incentive program Matt qualified for. How should Matt report this gain on his 2016 tax return?

a) $80,000 ordinary gain

b) $30,000 ordinary gain and $50,000 long-term capital gain

c) $50,000 ordinary gain and $30,000 long-term capital gain

d) $40,000 ordinary gain and $40,000 long-term capital gain

3) Roger inherits 1,000 share of Westcoast stock from his grandmother in 2016. According to the information received from the executor of his grandmother's estate, Roger's adjusted basis for the stock is $55,000. Roger's fiancé, Paula, receives 1,000 shares of Westcoast stock from her uncle as a gift in 2016. Her uncle tells Paula that his adjusted basis in the Westcoast stock is $7,000. What could cause the substantial difference in the adjusted basis for Roger's and Paula's respective 1,000 share of Westcoast stock?