Watson Company purchases used equipment 5-year MACRS property) for $210,000 on July 8, 2014. What is Watson' maximum allowable cost recovery deduction for 2014 on the equipment if this is the only purchase of equipment for 2014? Watson elects out of bonus depreciation.)

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Quizplus · Accepted Answer

The correct answer is A.The maximum allowable cost recovery deduction for 2014 is $54,000. This is calculated by multiplying the cost of the equipment ($210,000) by the MACRS percentage for the first year of a 5-year property (20%).

Watson Company Purchases Used Equipment 5-Year MACRS Property) for $210,000