Why Might a Taxpayer Elect to Depreciate Assets Using the Alternative

question 47

Multiple Choice

Why might a taxpayer elect to depreciate assets using the Alternative Depreciation System (ADS) ?
I.The taxpayer desires rapid write off of assets.
II.The taxpayer may be close to being subject to the alternative minimum tax.
III.The taxpayer is experiencing a low income time period.
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• A)Statements I and III are correct.
• B)Only statement I is correct.
• C)Statements II and III are correct.
• D)Statements I and II are correct.
• E)Statements I, II, and III are correct.

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Definitions:

Regression Model

A statistical technique used to predict the value of a dependent variable based on one or more independent variables.

Intercept Term

A constant in a regression model that represents the value of the dependent variable when all independent variables are zero.

Statistically Significant

A term indicating that an observed effect in a study is unlikely to have occurred due to chance alone, according to a predetermined threshold for significance.

Asymmetric Risk

A situation where the outcomes of a decision or investment have different potentials for gains and losses.