Laven Company, a Calendar Year Taxpayer, Purchased a Total of $561,240

question 79

Multiple Choice

Laven Company, a calendar year taxpayer, purchased a total of $561,240 new depreciable personalty during 2017. Which of the following statements is true? 

• A) Laven can elect to expense $510,000 of the cost. The $51,240 remaining cost is capitalized and subject to 50% bonus and MACRS depreciation.
• B) Laven can elect to expense $510,000 of the cost. The $51,240 remaining cost is capitalized and is not depreciable.
• C) Laven can expense the entire $561,240 cost using 100% bonus depreciation.
• D) The amount of the cost that Laven can elect to expense depends on Laven's 2016 taxable income.

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Definitions:

Duty of Notification

An agent’s obligation to inform the principal of the agent’s actions on the principal’s behalf and of all relevant information.

Communicate Offers

The process through which an offeror makes their proposal known to the offeree, initiating the possibility of forming a contract.

Indemnification

Indemnification is the process by which one party agrees to compensate another for any losses or damages suffered, often as part of a contractual agreement.

Breach of Contract

The failure to perform any term of a contract, written or oral, without a legitimate legal excuse.