Gowda Inc., a calendar year taxpayer, purchased $1,496,000 of equipment on March 23. This was Gowda's only purchase of depreciable property for the year. If the equipment has a 7-year recovery period, refer to Table 7.2 and compute Gowda's first and second-year MACRS depreciation. (Disregard the Section 179 deduction and bonus depreciation in making your calculation.) Use Table 7-2.

Question

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Based on the 7-year recovery period for MACRS depreciation, the first year's depreciation is calculated using the half-year convention, which is 14.29% of the basis. For a $1,496,000 purchase, the first year's depreciation would be $1,496,000 * 14.29% = $213,778.40. The second year, according to the MACRS schedule for 7-year property, uses a 24.49% depreciation rate, which would be $1,496,000 * 24.49% = $366,370.44. However, none of the provided choices exactly match these calculations, indicating a need for rounding or a different interpretation of the depreciation schedule. Therefore, without the exact figures from Table 7.2, the precise answer cannot be determined from the provided options, leading to the conclusion that none of these choices are correct.

Gowda Inc, a Calendar Year Taxpayer, Purchased $1,496,000 of Equipment on on March