1) MACRS deductions are a combination of which other methods of depreciation?
a) Sum-of-year’s-digits and straight line
b) Sum-of-year’s-digits and declining balance
c) Double declining balance and 150% declining balance
d) Double declining balance and straight line
2) A company purchased a commercial building for $100,000 and sold it 2 years later for
$180,000. They depreciated the building by $6,000 during this time. Their gains tax rate is
34%. Which of the following is the closest to the taxes they owe?
3) Which of the following statements is true?
a) Tax rates are based on two flat-rate schedules, one for individuals and one for
b) When businesses subtract expenses they always include capital costs.
c) For businesses, taxable income is total income less depreciation and ordinary expenses. d) When quantifying depreciation allowances, one must always divide first cost by the
MACRS 3-year life.
4) The correct calculated taxes due on a corporate taxable income of $13,000,000 are closest to which of the following?