Multiple choice

1.  Assume the same facts as in the previous question.  However, for this question, assume that Sheree purchased the business equipment for $300,000 (instead of $900,000).  What is the most that may be deducted in 2012 under Section 179 of the Code (ignore any potential deductions resulting from bonus deprecation or MACRS)?

1.$560,000

2.$300,000

3.$139,000

4.$0

 2.  Cody has AGI of $100,000 in 2012.  During 2012, Cody also had an uninsured personal casualty loss of $15,000 (after the $100 reduction).  The personal casualty loss related to an accident that Cody had with Chervaughn.  Cody carried no collision insurance and Chervaughn was also an uninsured motorist.  Assume Cody itemizes deductions in 2012.  What is the casualty loss amount that Cody may actually deduct on his return?

1.$15,000

2.$10,000

3.$5,000

4.$0

3.  Refer to the facts in the previous question.  However, for purposes of this question assume that Cody takes the standard deduction in 2012. What is the casualty loss amount that Cody may actually deduct on his return?

1.$15,000

2.$10,000

3.$5,000

4.$0

4.  TXX5761 Inc. paid all of the premiums for a $400,000 group-term life insurance policy on its 66-year-old President, Deenice.  Assume that pursuant to the applicable table, the cost per $1,000 of protection for a 1-month period is $1.27 (for a person aged 65 to 69).  What amount relating to the policy (if any) must be included in Deenice’s Gross Income for the year (assume Deenice was covered for all twelve months)?

1.$0

2.$5,334

3.$350,000

4.$400,000