Acct 4305 - Study guides, Class notes & Summaries

Which, if any, of the following statements best describes the history of the Federal  income tax? It did not exist during the Civil War. The Federal income tax on corporations was held by the U.S. Supreme Court to be  allowable under the U.S. Constitution. The Federal income tax on individuals was held by the U.S. Supreme Court to be  allowable under the U.S. Constitution. Both the Federal income tax on individuals and on...

An expense need not be recurring in order to be “ordinary.” True False Rationale: An expense is ordinary if it is normal, usual, or customary in the type of business  conducted by the taxpayer and is not capital in nature. However, the expense need not  be recurring to be deductible as ordinary. Question 2 1 / 1 pts Under the “one­year rule” for the current period deduction of prepaid expenses of cash  basis taxpaye...

Land improvements are generally not eligible for cost recovery. True False Rationale: Land improvements are 15­year class property. The § 179 deduction can exceed $500,000 in 2015 if the taxpayer had a § 179 amount which exceeded the taxable income limitation in the prior year. True False Rationale: The § 179 amount eligible for expensing in a carryforward year is limited to the lesser of (1) the statutory dollar amount ($500,000 in 2015 and 2014) reduced by the cost ...

Score for this attempt: 28 out of 30 Submitted Oct 20 at 11:25am This attempt took 58 minutes. Question 1 1 / 1 pts The cost recovery period for 3­year class property is 4 years. True False Question 2 1 / 1 pts If more than 40% of the value of property, other than real property, is placed in service  during the last quarter, all of the property placed in service in the second quarter will be  allowed 7.5 months of cost...

The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer’s filing status. True False Rationale: The election to itemize is appropriate when total itemized deductions exceed the standard deduction based on the taxpayer’s filing status. Bill paid $2,500 of medical expenses for his daughter, Marie. Marie is married to John and they file a joint return. Bill can include the $2,500 of expenses when calculating his...