Reference no: EM132893635
Questions -
Q1) Heizenburg Chemistry Labs Inc. purchased new five-year MACRS depreciable property in 2020 at a cost of $1,900,000. The property is eligible for section 179 depreciation and bonus depreciation, and Heizenburg elects to take the largest possible deduction. The property is depreciated using the standard MACRS half-year convention. What will be the deduction for bonus depreciation with respect to the property for 2020?
a. $1,900,000
b. $860,000
c. $1,040,000
d. $500,000
e. $1,200,000
Q2) If an individual taxpayer contributes capital gain property to a qualified public charity and wants to deduct fair market value, the deduction would be subject to which of the following limits?
a. 20 percent of the taxpayer's AGI.
b. 30 percent of the taxpayer's AGI.
c. 40 percent of the taxpayer's AGI.
d. 50 percent of the taxpayer's AGI.
Q3) Linda Smith paid $24,000 for a life-time annuity that will start when she is 65 years old. The annuity will pay $150 per month ($1,800 per year) for the rest of her life starting in January of the year that Linda reaches age 65. What is the exclusion ratio for the annuity and how much income does Linda have for a year during which she receives 12 monthly payments?
a. Exclusion ratio .333 and income of $1,200
b. Exclusion ratio .667 and income of $600
c. Exclusion ratio .667 and income of $1,200
d. Exclusion ratio .333 and income of $600