Sairra LLC purchased only one asset during the current year (a full 12-month tax year). On April 16 Sairra placed in service furniture (seven-year property)with a basis of $25,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). (Use MACRS Table 1.)(Round final answer to the nearest whole number.)
A)$1,786
B)$3,573
C)$4,463
D)$5,000
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

According to MACRS Table 1, seven-year property is depreciated over a period of eight years. Therefore, the maximum depreciation expense for the current year would be calculated as follows:
($25,000/8) x 0.1429 = $3,572.50 
Round to the nearest whole number: $3,573.

Sairra LLC Purchased Only One Asset During the Current Year