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Tax Topic 16 - Depreciation

This topic covers how to depreciate property. Taking depreciation is recovering the cost through deductions as when taking special depreciation allowances and deductions under MACRS. You will also learn how to opt to take a section 179 deduction, instead of depreciation deductions for certain property. In addition, you will learn the additional rules that must be followed for listed property. 

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Student Instructions:

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

Please use IRS Publication 946, and Form 1040 Instructions (Form 1040 instructions only up to page 98) to complete this tax topic.

Please note: Form 1040 Instructions (Form 1040 instructions only up to page 98) will be used for the rest of the topics in the initial tax preparer certification course. You will be responsible to answer questions from the Form 1040 instructions booklet (up to page 98) on every topic so read it carefully.

Tax Return Situation 1:

Prepare  Form 4562 for Jim Samuels (570-36-3611) using the following information. Jim will use MCRS to figure his depreciation.

Also prepare  Form 1040, Schedule C , and Schedule SE.

He owns Samuels Professional Services. He started this business in 2013 and dedicates most of his time to its functions.

The types of tasks they specialize in include but are not limited to the following:
bullet Typing of all types documents.
bullet Computer input of data.
bullet Other miscellaneous clerical services.

Complete a return for Jim Samuels.

bullet He is an unmarried man and has no dependents.
bullet No one can claim him as a dependent.
bullet His address is 1130 Secor Drive, Toledo, OH  43606.
bullet He does business at: 1133 W. Laskey Road, Toledo, OH 43606.

 

Income Statement  
   
Year Ended December 31, 2013  
   
Gross receipts $45,000
   
Expenses:  
   
Advertising $5,000
Rent $12,000
Repairs and Maintenance $450
Supplies $1,050
Taxes and licenses $1,100
Utilities (including telephone) $1,800
Bank service charges $150
Window washing $190
   
   
Estimated payments paid  

to federal

 $4,980
   

Complete Form 4562 and the worksheet below for Jim Samuels:
Property Date Acquired Useful life Cost Depr. Amount
Copy Machine 02-01-2013 _________ $2,500 _________
Fax machine 03-14-2013 _________ $145 _________
Telephone 03-15-2013 _________ $350 _________
Desks & Furniture 03-15-2013 _________ $800 _________
IBM Computer 01-13-2013 _________ $1,700 _________
Laser Printer 01-13-2013 _________ $600 _________
         

 

1. Look at the Form 1040 you prepared for Jim Samuels. What is the amount on Form 1040, Line 22?

A. $20,484.
B. $21,317.
 C. $19,069. 
D. $18,949.

2. Look at the Form 1040 you prepared for Jim Samuels. What is the amount on Form 1040, Line 27?

A. $946.
B. $923.
C. $1,506.
 D. $316.

 
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Revised: 11/26/17