Answer the following statements true (T) or false (F)
1. The MACRS system requires that residential rental property and nonresidential real property be depreciated using the straight-line method.
2. Capital improvements to real property must be depreciated over the remaining life of the property on which the improvements were made.
3. A tenant in an office building makes improvements to the office space that are qualified improvement property (QIP). The QIP will be depreciated over the remaining MACRS life of the building.
4. The straight-line method may be elected for depreciating tangible personal property placed in service after 1986.
5. The election to use ADS is made on a year-by-year, property-class by property-class basis for real and personal property.
1. TRUE
The straight-line method is the only acceptable method for real property under MACRS.
2. FALSE
Capital improvements are depreciated over the full life of the improvement.
3. FALSE
The cost of QIP is depreciated over 15 years and is eligible for Sec. 179 expensing and bonus depreciation.
4. TRUE
Straight-line depreciation for personal property is an option under MACRS.
5. FALSE
The election for real property is made on a property-by-property basis.
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