Douglas Bought Office Furniture Two Years and Four Months Ago

question 61

Multiple Choice

Douglas bought office furniture two years and four months ago for $25,000 to use in his business and elected to expense all of it under Sec.179.Depreciation of $3,500 would have been taken under the MACRS rules.If Douglas converts the furniture to nonbusiness use today,Douglas must

• A)amend the prior two years tax returns.
• B)include $3,500 in gross income in year of conversion.
• C)include $21,500 in gross income in year of conversion.
• D)include $25,000 in gross income in year of conversion.

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Definitions:

Dumping

The practice of a country or company exporting products at a price lower than the domestic market price, often considered unfair competition.

Unreasonably Low Prices

Pricing strategies that are significantly below the market average or cost of production, often used to eliminate competition or enter new markets.

Robinson-Patman Act

A United States federal law aimed at preventing unfair competition and price discrimination among businesses.

Price Fixing

When two or more companies collude to set a product’s price.