Deirdre's business purchased two assets during the current year (a full 12-month tax year). Deirdre placed in service computer equipment (5-year property) on January 20 with a basis of $15,000 and machinery (7-year property) on September 1 with a basis of $15,000. Calculate the maximum depreciation expense, (ignoring §179 and bonus depreciation). (Use MACRS Half-Year Convention) (Round final answer to the nearest whole number.)
A) $1,286.
B) $5,144.
C) $5,786.
D) $6,000.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The half-year convention applies. The calculations are $15,000 × 0.20 = $3,000 and $15,000 × 0.1429 = $2,144. The total is $5,144 ($3,000 + $2,144).

Deirdre's Business Purchased Two Assets During the Current Year (A