33. Which of the following assets is NOT generally considered a capital asset?
A)
Ken owns a personal residence.
B)
Drake owns U.S. government securities that he is holding as an investment.
C)
Rosie bought a personal auto earlier this year.
D)
Darren bought a computer to use in his business.
34. Two years ago, Raul purchased a parcel of raw land on which he could construct a new building for his hardware business. He paid $60,000 for the land and incurred $800 in legal fees associated with the title search. He also paid an attorney $2,000 to draft the contract for the purchase of the land. Property taxes on the land have totaled $1,200 annually. What is Raul's adjusted basis in the land?
A)
$60,000
B)
$60,800
C)
$65,200
D)
$62,800
35. Margaret purchased a used pickup truck at a cost of $12,400, with sales tax of $600, to use in her floral business. She purchased the pickup (five-year property) and placed it in service on June 1 of the current tax year.
Assuming Margaret opts out of bonus depreciation, using MACRS, what is the first-year cost recovery deduction that Margaret can claim?
If the Recovery Year Is: And the Recovery Period Is:
3-Years 5-Year
7-Year 10-Year
15-Year 20-Year
The Depreciation Rate Is:
1 33.33
2 44.45
3 14.81
4 7.41
5 11.52
6 5.76
7 8.93
8 4.46
9 6.56
10 6.55
11 3.28
12 5.90
13 5.91
14 5.90
15 5.91
16 2.95
17 4.46
18 4.46
19 4.46
20 4.46
21 2.231
A)
$1,240
B)
$2,600
C)
$5,200
D)
$1,300
36. Maria purchased manufacturing equipment several years ago at a cost of $16,000 to use in her business. She claimed $9,716 of cost recovery deductions. She sold the equipment for $8,000. What is the amount and character of the gain or loss resulting from this disposition?
A)
$9,716 ordinary income
B)
$8,000 ordinary loss
C)
$8,000 capital loss
D)
$1,716 of ordinary income, $0 long-term capital gain