On January 3, 2015, John Acquired and Placed into Service

question 1212

Multiple Choice

On January 3, 2015, John acquired and placed into service business tools costing $10,000. The tools have a 3- year class life. No other assets were purchased during that year. The depreciation in 2018 for those tools is (Sec. 179 and bonus depreciation were not applied)

• A) $741.
• B) $3,333.
• C) $1,920.
• D) $0.

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Definitions:

Asset Classes

Categories of assets with similar characteristics, such as equities, fixed income, real estate, and commodities, used in investment diversification.

Asset Allocation

The strategy of distributing investments among various types of assets (e.g., stocks, bonds, real estate) to optimize risk and reward based on an individual's or entity's goals and risk tolerance.

Excess Return

The return on an investment that exceeds a benchmark or risk-free return.

Bogey Portfolio

An investment portfolio used as a benchmark to measure the performance of other portfolios.