Which of the Following Statements with Respect to the Depreciation

question 13

Multiple Choice

Which of the following statements with respect to the depreciation of real property under MACRS is correct?

• A)Real property is depreciated using a mid-quarter convention.
• B)Only one-half year of depreciation is allowed in the year of acquisition of real property, regardless of the actual date the property is placed in service.
• C)Assuming the property is not disposed of during the year, the depreciation deduction for the second year of use of the real property will be greater than the depreciation deduction in the first year.
• D)In some cases, where a significant amount of property is acquired during the last quarter of the taxpayer's tax year, the taxpayer may be required to use a mid-quarter convention in calculating depreciation on real property.
• E)None of the above.

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Definitions:

Industrial Organization

A field of economics dealing with how firms' structures, strategies, and behaviors determine the nature and extent of competition.

Market Conditions

The current state of the economy and the supply and demand dynamics within a specific market.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Implicit Costs

The opportunity costs incurred by a firm for using its own resources without a direct monetary payment.