On May 15,2015,Brent purchased new farm equipment for $200,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does not take additional first-year depreciation (if available).Determine the cost recovery deduction for 2015.

Question

Quizplus · Accepted Answer

The farm equipment is 7-year property under MACRS. Using the half-year convention and the 7-year property table, the first-year depreciation rate is 10.71%. Therefore, the cost recovery deduction for 2015 is $200,000 * 10.71% = $21,420.

On May 15,2015,Brent Purchased New Farm Equipment for $200,000