Paul bought a computer for $15,000 for business use on March 18,2017.This was his only purchase for that year.Paul used the most accelerated depreciation method available,but did not elect Sec.179 and the property did not qualify for bonus depreciation.Paul sells the machine in 2019.The depreciation on the computer for 2019 is
A)$0.
B)$1,440.
C)$1,500.
D)$2,880.

Question

Quizplus · Accepted Answer

The computer is a 5-year property under MACRS. In 2019, the computer is in its third year of depreciation. Using the MACRS 5-year property table, the depreciation rate for the third year is 19.20%. Therefore, $15,000 x 19.20% = $2,880. However, since the computer was sold in 2019, the depreciation must be prorated for the part of the year it was owned. Assuming a mid-year convention, the depreciation is halved: $2,880 / 2 = $1,440.

Paul Bought a Computer for $15,000 for Business Use on March