ABC Corp bought a production machine on January 1, 2017 for $31,250. The company did not elect Section 179 expensing and elected out of claiming bonus depreciation in 2017, and is depreciating the machine using the MACRS accelerated depreciation tables for 5-year property. What is the 2019 depreciation (Year 3) deduction for the machine?

Question

Quizplus · Accepted Answer

The MACRS depreciation rates for 5-year property are:Year 1: 20%Year 2: 32%Year 3: 19.2%Year 4: 11.52%Year 5: 11.52%The depreciation deduction for Year 3 is $31,250 x 19.2% = $6,000.

ABC Corp Bought a Production Machine on January 1, 2017