Sairra LLC purchased only one asset during the current year (a full 12-month tax year). On April 16 Sairra placed in service furniture (seven-year property)with a basis of $35,000. Calculate the maximum depreciation expense for the current year (ignoring §179 and bonus depreciation). (Use MACRS Table 1.)(Round final answer to the nearest whole number.)
A)$2,501
B)$5,002
C)$5,892
D)$7,000
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum depreciation expense is calculated using the MACRS half-year convention for seven-year property. The first-year depreciation rate for seven-year property is 14.29%. Therefore, $35,000 * 14.29% = $5,002.65, rounded to $5,002.

Sairra LLC Purchased Only One Asset During the Current Year