Deirdre's business purchased two assets during the current 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 October 1 with a basis of $15,000. Calculate the maximum depreciation expense, rounded to a whole number (ignoring §179 and bonus depreciation):
A) $1,286
B) $5,144
C) $5,786
D) $6,000
E) None of these

Question

Quizplus · Accepted Answer

The maximum depreciation expense for the computer equipment is $3,000 ($15,000 x 20% x 10/12) and the maximum depreciation expense for the machinery is $2,786 ($15,000 x 14.29% x 3/12). The total maximum depreciation expense is $5,786.

Deirdre's Business Purchased Two Assets During the Current Year