1.  In March 2012, Rion, a calendar-year taxpayer, purchased new 7-year property for $500,000.  The property was immediately placed into service (and is being used exclusively in Rion’s extremely profitable business).  No other personal property will be purchased by Rion in 2012.  Rion wants to take the largest possible tax deduction in 2012 relating to the equipment.  Compute the largest tax deduction possible in 2012 for the equipment (consider the Section 179 election, Bonus Depreciation, and MACRS, if applicable):

1.$500,000

2.$345,293

3.$319,500

4.$139,000

 

2. During 2012, 7-year MACRS property was placed in service by Ayaris, a calendar-year taxpayer.  Assume that Ayaris does NOT make a Section 179 election or take any bonus depreciation.  The property will most likely be depreciated over:

1.Eight calendar years

2.Seven calendar years

3.Three and one-half calendar years

4.One calendar year

 

3.Andreina contributed some inventory from her sole proprietorship to a public charity for its use.  On the date of the contribution, Andreina’s basis in the inventory was $10,000 and the fair market value was $21,000.  What is the amount of charitable contribution allowed (before considering any potential percentage limitation)?

1.$0

2.$10,000

3.$11,000

4.$21,000

 

4.What was Tomoe’s Taxable Income for 2012? Assume Tomoe is single and has TWO dependent children, Fritznel and Micheala.  Assume further that Tomoe’s 2012 AGI is $75,000 and that Tomoe had itemized deductions of $13,000.

1.$50,600

2.$54,400

3.$62,000

4.$75,000

 

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