ACC 547  Week 3 Tax Law Research Worksheet


What are the similarities and differences between personal property, real property, intangible property, and natural resources? Provide an example of each. Describe the cost recovery method used for each type of asset. The Modified Accelerated Cost Recovery System (MACRS) uses a recovery period method and a convention to depreciate tangible personal property. Why are a recovery period and a convention important in calculating depreciation?


What is the difference between an ordinary, a capital, and a Section 1231 asset? Why is this distinction important? What assets are subject to depreciation recapture? Compare Section 1245 and Section 1250 recapture.


How does the alternative minimum tax system differ from the regular tax system? How is it similar? Why did Congress implement the alternative minimum tax system? The starting point for computing alternative minimum taxable income is regular taxable income. What are some adjustments and preferences to regular taxable income to compute alternative minimum taxable income?



Sue owns a home in Arizona and in New York. She spends winters in Arizona and summers in New York. She also has a houseboat in Hawaii. All of these are her personal residences, and none is rented. All of the properties have mortgages on which she pays interest.

What are the limits, if any, on the deductibility of the mortgage interest?

Is the deduction for AGI or from AGI?

When a taxpayer has loans that exceed the limits for deductibility, how is the amount of deductible interest expense determined?