What is the maximum amount that can be spent on depreciable personalty in the last quarter of the year to avoid the mid-quarter convention if $240,000 of equipment was purchased in the first three quarters (and neither Sec.179 nor bonus depreciation is claimed)?
A)$80,000
B)$968,000
C)$160,000
D)$240,000

Question

Quizplus · Accepted Answer

To avoid the mid-quarter convention, more than 40% of the total depreciable personalty must not be placed in service in the last quarter. If $240,000 was spent in the first three quarters, the total for the year should not exceed $400,000, so the maximum for the last quarter is $160,000.

What Is the Maximum Amount That Can Be Spent on Depreciable