Reference no: EM132960361

Questions -

Q1. Carolyn purchases new trucks (5-year MACRS property) costing $3,500,000 for use in her floral business on January 5, 2020. What is her maximum allowable cost recovery on the trucks in 2020 using all applicable depreciation options?

$700,000

$2,300,000

$1,040,000

$-0-

$3,500,000

Q2. Oscar buys a 10 percent interest in Britanny Corporation for $92,000 cash on January 1, 2019. During 2019, Britanny Corporation reports a loss of $30,000 and pays cash dividends to shareholders of $10,000. For 2020, Britanny Corporation has a loss of $60,000 and pays cash dividends of $20,000. If Britanny Company is organized as an S corporation, Oscar's basis in the Britanny Corporation stock at the end of 2020 is:

$104,000.

$86,000.

$80,000.

$92,000.

$98,000.

Q3. Cathy owns property subject to a mortgage of $5,000. Annual real estate taxes are $1,200 and are due and payable on December 31. Cathy sells her property on September 1 of the current year. The buyer assumes her $5,000 mortgage, and finances the sale by taking a mortgage note of $50,000 and gives Cath property valued at $7,500 with an adjusted basis of $2,500. The buyer agrees to pay the seller's portion of the property taxes. What is Cathy's amount realized?

$62,900

$62,100

$62,500

$57,500

$63,300

Q4. During 2020, Witt Processing Corporation places $210,000 of Section 179 property in service for use in its business. What is the amount of Witt Processing's maximum Section 179 deduction for 2020 if the corporation's taxable income is $105,000?

$50,000

$200,000

$210,000

$105,000

$25,000