Lopez Corporation is a calendar-year taxpayer.What is the MACRS depreciation percentage deduction for the last year for a 7-year asset acquired May 12 under the mid-quarter convention.
A)1.09%
B)3.33%
C)5.53%
D)7.64%

Question

Quizplus · Accepted Answer

For a 7-year asset under the mid-quarter convention, the MACRS depreciation schedule dictates that in the final year (the 8th year due to the mid-quarter convention), the depreciation percentage is 3.33%. This is because the mid-quarter convention adjusts the depreciation rates to account for the quarter of the year in which the asset was placed in service, extending the depreciation period and altering the final year's depreciation rate accordingly.

Lopez Corporation Is a Calendar-Year Taxpayer