Terra Corporation,a Calendar-Year Taxpayer,purchases and Places into Service Machinery with a 7-Year

question 86

Multiple Choice

Terra Corporation,a calendar-year taxpayer,purchases and places into service machinery with a 7-year life that cost $125,000.The mid-quarter convention does not apply.Terra elects to depreciate the maximum under Sec.179.Terra's taxable income for the year before the Sec.179 deduction is $700,000.What is Terra's total depreciation deduction related to this property?

• A)$17,863
• B)$42,863
• C)$25,000
• D)$39,290

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Definitions:

Risk Level

The degree of uncertainty or potential financial loss inherent in an investment decision.

Standard Deviation

An indicator of the degree of spread or diversity within a collection of numbers.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Good Economy

A state of economic health characterized by strong growth, low unemployment, and stable prices.