Tax for Personal, Real, and Intangible Property, and Natural Resources

Discussion Questions
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Discussion Questions
Response to question 1
Natural resources, real property, and personal property are all tangible property given that one can see and touch them. Personal property is understood as all tangible property that is not a real property or a natural resource. Real property basically refers to land as well as all property that is attached to land such as buildings. Natural resources are understood as assets that come about naturally such as metal or oil. Intangible property refers to all intellectual property rights such as copyrights and patents, in addition to any other value that is not assigned as a tangible asset in a purchase such as goodwill (Piper, 2011). All of these have an anticipated useful life of over 12 months.
Type of AssetExamples1Natural resourcesCommodities like timber, oil, and metals2Intangible propertyPatents, copyrights, startup and organizational costs, and goodwill3Real propertyLand and items that are attached to land for instance buildings including residential dwellings, office buildings, and warehouses4Personal propertyMachinery, furniture, equipment and automobiles
There are 3 different sorts of cost recovery: depletion, amortization, and depreciation.
Type of AssetType of cost recovery1Personal propertyMACRS depreciation, and this is typified by double declining balance method, half-year convention, and shorter recovery periods2IntangibleAmortization, typified by full-month convention, straight-line method, and various recovery periods depending on intangible type3Real propertyMACRS depreciation, typified by straight-line method, longer recovery periods, and mid-point convention4Natural resourcesDepletion (percentage or cost), cost depletion assigns the cost of a natural resource basing upon resource estimates, and straight-line method.
Recovery period method is the statutory life or the period which a taxpayer would allocate the depreciation expenditure. Profitable taxpayers usually have a preference for the recovery period method to be as short as possible so that they could recoup the basis as fast as possible. Convention is important given that it determines how much depreciation is taken in both the acquisition year and disposition year (Francis, 2012).
Response to question 2
The idea of alternative minimum tax is fair since i...