Under the current tax law, an asset that is classified as 7-year property and has a cost of $400,000 would result in a depreciation deduction in Year 3 of

Question

Quizplus · Accepted Answer

The depreciation expense for 7-year property is calculated using the MACRS method with a double declining balance (DDB) depreciation rate of 14.29% in Year 1 and 24.49% in Year 2 and Year 3. The depreciation deductions for each year are:
Year 1: $400,000 x 14.29% = $57,160
Year 2: ($400,000 - $57,160) x 24.49% = $80,867
Year 3: ($400,000 - $57,160 - $80,867) x 24.49% = $69,960
Therefore, the correct answer is B.

Under the Current Tax Law, an Asset That Is Classified