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Flashcards in DEPRECIATION Deck (26):
1

SECTION 1231 PROPERTY IS ____________
SECTION 1245 PROPERTY IS ____________
SECTION 1250 PROPERTY IS ____________

SECTION 1231 DEPRECIABLE TRADE OR BUSINESS PROPERTY
SECTION 1250 DEPRECIABLE REALITY
SECTION 1245 EQUIPMENT

2

1231 - BUSINESS PROPERTY
1245 - BUSINESS PROPERTY MACHINERY AND EQUIPMENT
1250 - REAL ESTATE

1231 Real or bus property held more than 1 year (not inventory); Gain is long term capital but loss is an ordinary loss

1245 Machinery and Equipment;Depreciation recapture is ordinary gain, but remainer is 1231 (see above, LT capital gain) Depreciation Mid-quarter or 1/2 Year

1250 real estate in business; Depreciation in excess of straight line is recaptured. Depreciation 27.5 year residential or 39 year non-residential - mid month convention.

3

WHAT IS THE DEPRECIATION PERIOD FOR RESIDENTIAL REAL ESTATE

27.5

4

COVENANT NOT TO COMPETE IS _______________ INCOME

ORIDINARY

5

SALE OF ACCOUNTS RECEIVABLE RESULTS IN ____________ INCOME

ORDINARY NOT CAPITAL GAIN

6

INTANGIBLES ARE AMORITIZED OVER A __________ YEAR PERIOD

15 YEARS

7

WHAT IS LISTED PROPERTY?

PROPERTY THAT IS USED LESS THAN 50% IN A BUSINESS (SHARED BETWEEN HOME AND BUSINESS E.G. CARS AND COMPUTERS)

8

NON RESIDENTIAL REAL ESTATE IS/ISNOT DEPRECIATED USING MACRS

NO MACRS FOR NON-RESIDENTIAL REAL ESTAE

9

MID QUARTER CONVENTION IS USED IF

MORE THAN _____ %
OF DEPRECIABLE ASSETS EXCEPT REAL PROPERTY ARE PLACED IN SERVICE DURING ____ QUARTER

and then use mid quarter of the quarter it was pruchased.

40% ARE PLACED IN SERVICE DURING LAST QUARTER

10

OFFICE FURNITURE IS ___ YEAR PROPERTY

7 YEAR PROPERTY

11

COMPUTERS ARE WHAT YEAR PROPERTY ____

COMPUTER ARE 5 YEAR PROPERTY

12

MOST MACHINERY IS WHAT YEAR PROPERTY

MOST MACHINERY IS 7 YEAR PROPERTY

13

SPECIAL TOOLS ARE WHAT YEAR PROPERTY

SPECIAL TOOLS ARE 3 YEAR PROPERTY

14

AUTOMOBILES ARE WHAT YEAR PROPERTY

5 YEARS

15

CCT ARE WHAT YEAR PROPERTIES

COMPUTER CARS AND TRUCKS ARE 5 YEAR PROPERTY

16

who may not claim section 179

trusts and estates

17

is listed property eligible for 179 and what is listed property

no listed property (depreciable property that is used less than 50% in trade or business)

18

when is the ADS used?
is MACRS mandatory?

the ADS can be used for listed property, listed property is business property that used less than 50% in a trade or business.

MCRS is required unless ADS is elected.

NonResdiential property is 39 years. It just looks like there's 40 years on the ADS table because you have the part in the first year and part in the last year.

19

what does no bonus depreciation or section 179 indicate about the property

that it's listed property , less than 50%

20

listed property calculating depreciation for business is a function of


$ x % x %

Less than 50% for business

Cost of Property x % in table for that year and class of property x % of business use

21

more than 50% use of property = ___________

can use MACRS

22

OFFICE MACHINERY _______ YEARS MACRS
ALL OTHER MACHINERY _________

5 YEARS OFFICE MACHINERY/EQUIPMENT COPIERS FOR EXAMPLE
7 YEARS MACHINERY BUSINESS

23

I'M A COPIER WHAT AM I ON MACRS

5 YEAR PORPERTY

24

I'M A CAR WHAT AM I ON MACRS

5 YEAR PROPERTY

25

I'M A COMPUTER WHAT AM I ON MACRS

5 YEAR PROPERTY

26

I'M NOT ON T HE MACRS LIST, WHAT AM I

7 YEAR PROPERTY