Choice "b" is correct. MACRS 5-year property includes automobiles, light
trucks, computers, typewriters, copiers, duplicating equipment, and other such
items. The cost basis of the MACRS 5-year property is $28,000, calculated as
follows:
|
|
|---|
Computer | $ 3,000 |
Delivery van | 25,000 |
MACRS 5-year | $ 28,000 |
Choice "a" is incorrect. While the computer ($3,000) is included, the
delivery van ($25,000) is also 5-year MACRS property.
Choice "c" is incorrect. While the delivery van ($25,000) is included, the
computer ($3,000) is also MACRS 5-year property.
Choice "d" is incorrect. This answer option assumes that all of the assets in
the question are MACRS 5-year property. However, the computer desk and the
office furniture are MACRS 7-year property, which includes office furniture and
fixtures, equipment and property with no ADR midpoint classified elsewhere, and
railroad track.
