Reference no: EM131728226

Question 1 - Azona Corporation (a calendar-year taxpayer) purchased only one business asset during the year, 7-year used property that cost $2,600,000. Compute Azona's depreciation for current year assuming that

 a. the asset was purchased and placed in service on September 30.

 b. the asset was purchased and placed in service on October 1.

Question 2 - On March 1, Harry Corporation (a calendar-year taxpayer) purchased and placed in service of?ce furniture costing $550,000. Compute the maximum amount Harry Corporation can elect to expense under Section 179 for this furniture if  

a. this is the only asset placed in service this year by Harry Corporation. 

b. in addition to the $550,000 of of?ce furniture, Harry Corporation also acquired and placed in ser-vice $980,000 of factory equipment during the year.

c. in addition to the $550,000 of of?ce furniture, Harry Corporation also acquired and placed in ser-vice $1,860,000 factory equipment during the year.

Question 3 - Mason is single and the original shareholder of 1,000 shares of Section 1244 stock in Miles Corpo-ration acquired four years ago. He has a basis of $65,000 in the stock. The stock has signi?cantly declined in value so he sells it in the current year for $5,000. Identify the amount and type of gain or loss that Mason has on this sale.

a. $50,000 ordinary loss and a $10,000 capital loss 

b. $60,000 capital loss

c. $53,000 ordinary loss and a $12,000 capital loss

d. $60,000 ordinary loss

Question 4 - Mason is single and the original shareholder of 1,000 shares of Section 1244 stock in Miles Corpo-ration acquired four years ago. He has a basis of $65,000 in the stock. The stock has signi?cantly declined in value so he sells it in the current year for $5,000. Identify the amount and type of gain or loss that Mason has on this sale.

a. $50,000 ordinary loss and a $10,000 capital loss 

b. $60,000 capital loss

c. $53,000 ordinary loss and a $12,000 capital loss

d. $60,000 ordinary loss