# Shared Flashcard Set

## Details

Taxes II
ACC 430
26
Accounting
03/24/2013

Term
 In general, a taxpayer must capitalize the cost of any asset with a useful life of more than __________.
Definition
 In general, a taxpayer must capitalize the cost of any asset with a useful life of more than __________.   1 year
Term
 Amortization is the straight-line recovery of the cost of intangibles. Amortization of goodwill is allowed over _______ years.
Definition
 Amortization is the straight-line recovery of the cost of intangibles. Amortization of goodwill is allowed over _______ years.     15 years
Term
 Depreciation on an apartment building acquired and placed in service on May 28 of this year at a cost of \$2,000,000 (the land cost an additional \$400,000) will amount to _________?
Definition
 \$45,555   2,000,000 / 330 = 6,060.60 * 7.5= 45,555
Term
 On November 7 of this year, a calendar year taxpayer, placed in service \$250,000 of 7 - year recovery property. If this is the only property placed in service during the year and Section 179 and bonus depreciatiokn are not available what amount of depreciation can be taken for the year of acquistion?
Definition
 8,928   250,000*1/7*2*1.5/12
Term
 Cost depletion amounted to \$200,000. Percentage depletion amounted to \$210,000. Which amount is deductible for the year?
Definition
 \$210,000
Term
 Alice purchased a business for \$100,000 on June 1, of this year and immediately began operation of that business. The purchase price was allocated to assets using the residual method. As a result, machinery and equipment was allocated \$60,000 in cost, inventory and other identifiable assets amounted to \$30,000 and goodwill was allotted \$10,000 of cost.  What amount amortization is allowed for the year?
Definition
 \$389   10,000/15*7/12
Term
 Construct a depreciation table for a 5-year MACRS asset costing \$20,000 and indicate the amount of depreciation for year four.
Definition
Term
 Taxpayer purchased \$800,000 of depreciable machinery and equipment during the year. What is the maximum amount of Sec. 179 depreciation that can be taken for the year?
Definition
 \$500,000
Term
 Taspayer purchased \$2.4 million of depreciable machinerya nd equipment during te year. What is the maximum amount of Sec. 179 depreciation that can be taken for the year?   What amount of bonus depreciation can be taken for the year?
Definition
 Sec. 179 \$100,000   Bonus: 1.15 mil
Term
 Attorney  an accounting fees, stock issuance and other costs amounting to \$41,000 were capitalized as organization costs in January of this year. The corporation started operation in July of the year what amount of amortization may be taken by the corporation for this first year of operations?     Now assue organizations cost totaled \$53,000. What amount of amortization may be taken by the corporation for the first year of operations?
Definition
 Situation 1) \$6,200 (5000+1,200)    Situation 2)  \$3700   (2,000 + 1,700)
Term
 An indicidual taxpayer has the following gains and losses during the year. You sold stocks  held for more than 1 year for gains of \$12,000 and losses of \$5,000. You sold stocks held for less than 1 year for a loss \$2,000. You sold business property for a \$15,000 that orginally cost \$10,000. During the three years you held the property you took \$3,000 of depreciation (SL).   How much is Long-term capital Gains? If a C-corp how much LTCG?
Definition
 13,000   C-corp) 600
Term
 Taspayer, a sole proprietor purchased a machine for \$15,000 and depreciated it using an accellerated method over several years. The basis at the time of sale was \$6,000. The basis would have been \$9,000 if straight line depreciation had been used. The machine was sold for \$17,000. How much Sec. 1231 gain does the taxpayer report as a result of these transactions?
Definition
 Sec. 1231) 2,000
Term
 LTCG   5,000 LTCL    3,000 STCG   5,000 STCL     10,000 1231G   10,000 1231L  4,000
Definition
 3,000 LT 0 O.I.
Term
 LTCG   3,000 LTCL    5,000 STCG   10,000 STCL     5,000 1231G   4,000 1231L  10,000
Definition
 0 LT (3,000) O.I.
Term
 LTCG   3,000 LTCL    20,000 STCG   19,000 STCL     1,000 1231G   8,000 1231L  1,000
Definition
 O.I. 8,000 0 LT
Term
 LTCG   20,000 LTCL    3,000 STCG   1,000 STCL     19,000 1231G   1,000 1231L  8,000
Definition
 O.I (8,000) 0 LT
Term
 Taxpayer, a proprietor, acquired a building for \$1,000,000 several years ago. The basis at the time of sale is \$600,000. The basis would have been \$700,000 if straight line depreciation had been used. The sales price is \$1,200,000. What amount of Sec 1231 gain will be reported?   How much Sec. 1231 gain will be reported by the taxpayer if the taxpayer is a C corp.
Definition
 1) 500,000   2) 440,000
Term
 Net Section 1231 gains may be converted to ordinary income if there was a recognized Section 1231 loss within the last ___ years.
Definition
 5 years
Term
 In May 2005, Joyce transferred property with an adjusted basis of \$60,000 (FMV \$70,000) to her newly formed corporation in exchange for all of the stock.   What will be the basis of the stock she holds?
Definition
 \$60,000
Term
 alex exchanged machinery with a basis  of \$40,000 and a fair market value of \$60,000 in exchange for 50 shares and cashe of 10,000. Bruce contributed \$50,000 in cash for 50 shares in a qualified 351 transaction. What is the basis of th emachinery to the corporation?
Definition
 50,000
Term
 Ajax Corporation had its plant destroyed by fire in 2003. The plant had a basis of \$500,000 before the fire and insurance proceeds of \$750,000 were received in 2004. By what date must Ajax Corporation reinvest in order to avoid paying tax?   What is Ajax Corporation's basis in its new plant assumin git time invests \$800,000 in it?
Definition
 12/31/06   550,000
Term
 Charles sold 100 shares of stock in Xebo corporation on Dec. 23, 2004 for \$8,000. The stock was purchased for \$10,000 in 2000. On Jan. 15, 2005 Charles decided that he had made a mistake and, believing that the stock of Xebo would increase in price he purchased 100 shares of stock for \$8,500. charles will recognize a loss of how much for 2004?   What is Charles bsis in the stock he purchased in 2005?
Definition
 0   Basis 10,500
Term
 Alber has agree to exchange investment land with a basis of \$10,000 and a car (used in business ) with a basis of \$5,000 and a fair market value of \$10,000 for a newer car (for business use) with a basis of \$40,000 and a FMV of \$50,000. Albert has held both the land and car for more than two years. What basis will Albert Have in the newest car follwing this transaction?
Definition
 45,000
Term
 The Crasco Company's manufacturing plant burned to the ground in Jan.  of this year. This manufacturing facility was primarily devoted to production of copper pots and other copper decorator items and included csting and forging equipment. INsurance proceeds of \$200,000 were received by the company in March. The plant had orginally cost the company \$300,000 but had been depreciated (SL) over the years so that its basis at the time it was destroyed was only \$140,000. Crasco invested \$190,000 in a new plant in July. The new plant is also devoted to castings and forging copper pots and decorator items. What income or loss must Crasco recognize as a reslut of these transactions?
Definition
 Gain 60,000
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