On April 12, 2017, Suzanne bought a computer for $20,000 for business use. This was the only purchase for that year. Suzanne used the most accelerated depreciation method available but did not elect Sec. 179. Bonus depreciation was not available. Suzanne sells the machine in 2018. The depreciation on the computer for 2018 is

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Suzanne used the most accelerated depreciation method available, which is the double declining balance method. For a 5-year property like a computer, the depreciation rate is 40% (double the straight-line rate of 20%). In 2017, she would depreciate $8,000 (40% of $20,000). In 2018, she would depreciate 40% of the remaining $12,000, which is $4,800. However, since the computer was sold in 2018, the depreciation must be prorated for the part of the year it was used. Assuming a half-year convention, the depreciation for 2018 would be $2,400 (half of $4,800). However, the closest option is $3,200, which suggests a different proration or calculation method was used.

On April 12, 2017, Suzanne Bought a Computer for $20,000