On March 23, 2014, Saturn Investments Corporation purchases a $5,000 computer 5-year property) for business- use. On November 27, 2014, it pays $4,000 for new office furniture 7-year property). It does not wish to use the Section 179 election to expense. How much depreciation may Saturn deduct on the computer for 2014?

Question

Quizplus · Accepted Answer

For 5-year property, the half-year convention applies, and the MACRS depreciation rate for the first year is 20%. Therefore, the depreciation for the computer is 20% of $5,000, which is $1,000.

On March 23, 2014, Saturn Investments Corporation Purchases a $5,000