Question

In a farming business, MACRS straight-line cost recovery is required for all fruit bearing trees.

a. True
b. False

Answer 1

The claim about MACRS straight-line cost recovery for fruit bearing trees in farming is false; different depreciation methods, including accelerated options, are often used.

Step-by-step explanation:

The statement that MACRS straight-line cost recovery is required for all fruit bearing trees in a farming business is false. The Modified Accelerated Cost Recovery System (MACRS) allows for different depreciation methods, but it generally doesn't require straight-line depreciation for fruit bearing trees. In many cases, farmers can use the general depreciation system (GDS) under MACRS, which often involves accelerated depreciation over a recovery period that is appropriate for the specific type of asset.