Wu Copy Shop purchases a new copy machine in July 2017 for $30,000.No other depreciable assets are placed in service in 2017.Since Wu Copy Shop expects to be in a much higher tax bracket in future years,it desires to minimize its current cost recovery amount to the fullest extent possible.What is the amount of Wu Copy Shop's ADS depreciation for 2017?
A)$1,500
B)$3,000
C)$4,500
D)$5,400
E)$6,000

Question

Quizplus · Accepted Answer

The ADS (Alternative Depreciation System) for non-residential property like a copy machine is typically 9 years. For 2017, the depreciation would be $30,000/9 = $3,333.33. However, since the machine was purchased in July, only half-year depreciation applies, so $3,333.33/2 = $1,666.67, rounded to $1,500.

Wu Copy Shop Purchases a New Copy Machine in July