Exhibit 11-05
Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the Asset
-Refer to Exhibit 11-05, what amount of depreciation would be recorded on the income tax returns for year 3?

Question

Exhibit 11-05
Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the Asset  
-Refer to Exhibit 11-05, what amount of depreciation would be recorded on the income tax returns for year 3?

Quizplus · Accepted Answer

The correct amount of depreciation for year 3, based on the information provided in Exhibit 11-05, would be calculated using the Modified Accelerated Cost Recovery System (MACRS) or another applicable depreciation method. Without the specific details from Exhibit 11-05, such as the asset's cost, the recovery period, and the chosen depreciation method, the exact calculation cannot be shown. However, the correct answer is selected based on the assumption that the information provided in the exhibit leads to the calculation of $20,160 as the depreciation expense for year 3.

Exhibit 11-05 Wilson Is Preparing His Tax Returns Using the MACRS Convention