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    PracticeCPA®CPA REG Practice Exam 5Question 53
    Hard1 markMultiple Choice
    Area III: Property TransactionsREGTaxationCost Recovery

    CPA · Question 53 · Area III: Property Transactions

    A taxpayer purchased a $100,000 machine for business use. The taxpayer expensed $20,000 under Section 179. The remaining basis is depreciated using MACRS. What is the basis for MACRS depreciation?

    Answer options:

    A.

    $100,000

    B.

    $80,000

    C.

    $20,000

    D.

    $0

    How to approach this question

    Order of Depreciation: 1. Section 179. 2. Bonus Depreciation. 3. MACRS.

    Full Answer

    B.$80,000✓ Correct
    The depreciable basis for MACRS is the cost of the asset reduced by any Section 179 expense deduction taken. $100,000 - $20,000 = $80,000.

    Common mistakes

    Applying MACRS to the full cost.
    Question 52All questionsQuestion 54

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