Omar acquires used 7-year personal property for $100,000 to use in his business in February 2015.Omar does not elect § 179 expensing,but does take the maximum regular cost recovery deduction.He elects not to take additional first-year depreciation.As a result,Omar will have a positive AMT adjustment in 2015 of what amount?
A)$0
B)$3,580
C)$10,710
D)$14,290
E)None of the above

Question

Quizplus · Accepted Answer

The AMT adjustment is the difference between the regular MACRS depreciation and the AMT depreciation. For 7-year property, the regular MACRS uses the 200% declining balance method, while AMT uses the 150% declining balance method. The difference in depreciation for 2015 results in a positive AMT adjustment of $3,580.

Omar Acquires Used 7-Year Personal Property for $100,000 to Use