【正文】 ost is recovered using the ADS straightline method. ANS: T PTS: 1 DIF: 1 REF: p. 812 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 20. When lessor owned leasehold improvements are abandoned because of the termination of the lease, a loss can be taken for the unrecovered basis. ANS: T PTS: 1 DIF: 1 REF: p. 813 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 88 2020 Comprehensive Volume/Test Bank 21. The costs of qualified leasehold improvements owned by the lessee are recovered over a 15year MACRS recovery period. ANS: T PTS: 1 DIF: 1 REF: p. 812 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 22. For all property placed in service in 2020, the 167。 179 expensing 4 Cost recovery: MACRS real property Unchanged 4 5 Cost recovery: MACRS personal property and Modified 5 167。 179 expensing New 30 Listed property: 50% business use test Unchanged 30 31 Listed property: effect of statutory dollar amounts Unchanged 31 32 Listed property: statutory dollar amounts Unchanged 32 33 Listed property: statutory dollar amounts and Unchanged 33 midquarter convention 34 Listed property: cost recovery recapture Modified 34 35 Listed property: leasing and inclusion amount Unchanged 35 36 Listed property: substantiation Unchanged 36 37 Alternative depreciation system (ADS): AMT New adjustment 38 ADS: straightline Unchanged 38 39 ADS: convention for personalty Unchanged 39 40 ADS: election to use Unchanged 40 41 ADS: election to use Unchanged 41 42 ADS: convention for realty Unchanged 42 43 Covenant not to pete: 167。 280F limits Unchanged 28 29 Listed property: 167。 197 intangible Unchanged 38 39 Startup expenditures Unchanged 39 40 Depletion: cost versus percentage Unchanged 40 PROBLEMS 1 Cost recovery: MACRS personal property Unchanged 1 2 Cost recovery: MACRS real property Unchanged 2 3 Cost recovery: MACRS personal property and Modified 3 167。 179 expensing Unchanged 9 10 Listed property: luxury auto and recapture Modified 10 11 Listed property: luxury auto Unchanged 11 12 Listed property: predominant business use Unchanged 12 13 Depletion: cost versus percentage Unchanged 13 84 2020 Comprehensive Volume/Test Bank Status: Q/P Question/ Present in Prior Problem Topic Edition Edition ESSAY 1 Cost recovery: halfyear versus midquarter Unchanged 1 convention 2 Cost recovery: MACRS realty and residential Unchanged 2 rental classification 3 Cost recovery: farm property Unchanged 3 4 Listed property: 167。 179 deduction can exceed $250,000 in 2020 if the taxpayer had a 167。 179 expense amount that is carried forward is subject to the business ine limitation in the carryforward year. ANS: T PTS: 1 DIF: 1 REF: p. 814 OBJ: 3 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 25. Taxable ine for purposes of 167。 179 amount before the business ine ceiling is applied. PTS: 1 DIF: 1 REF: p. 815 OBJ: 3 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min Depreciation, Cost Recovery, Amortization, and Depletion 89 used for the production of ine is not eligible for 167。 179 limit for a sports utility vehicle with a GVW of 7,000 pounds used in a trade or business is $25,000. ANS: T PTS: 1 DIF: 1 REF: p. 814 | p. 818 OBJ: 3 | 4 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 30. Once the morethan50% business usage test is passed for listed property, it does not matter if the business usage for the property drops to 50% or less during the recovery period. ANS: F If the business usage declines to 50% or less, the straightline method must be used and the property is subject to cost recovery recapture. PTS: 1 DIF: 1 REF: p. 818 | p. 819 OBJ: 4 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 31. If a new car that is used predominantly in business is placed in service in 2020, the statutory dollar cost recovery limit under 167。 280F limit). The cost recovery in the first year using straightline would be $8,000 [($80,000 ? 10% = $8,000) (limited to $10,960。 197 intangible and is amortized over a 15year period. PTS: 1 DIF: 1 REF: p. 822 OBJ: 7 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 812 2020 Comprehensive Volume/Test Bank intangibles are generally not 167。 179 election. Tan did elect not to take additional firstyear depreciation. Determine the total deductions in calculating taxable ine related to the machines for 2020. a. $24,000. b. $25,716. c. $102,000. d. $132,858. e. None of the above. ANS: B The regular MACRS is calculated as follows: 10year property ($200,000 ? .10) $20,000 7year property ($40,000 ? .1429) 5,716 Total regular MACRS $25,716 PTS: 1 DIF: 1 REF: p. 85 to 88 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 7. James purchased a new business asset (threeyear property) on July 23, 2020, at a cost of $50,000. He did not elect to expense any of the asset under 167。 179, nor did she elect straightline cost recovery. Determine the cost recovery deduction for 2020 for these assets. a. $5,858. b. $7,464. c. $9,586. d. $19,429. e. None of the above. ANS: D The halfyear convention applies in this case. Fiveyear property: Additional firstyear depreciation ($20,000 ? 50%) $10,000 Regular MACRS ($10,000 ? .20) 2,000 Depreciation, Cost Recovery, Amortization, and Depletion 817 Sevenyear property: Additional firstyear depreciation ($13,000 ? 50%) 6,500 Regular MACRS ($6,500 ? .1429) 929 Total cost recovery $19,429 PTS: 1 DIF: 1 REF: p. 85 to 810 | Table OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 11.