Eric is a self-employed consultant.In May of the current year,Eric acquired a computer system (5-year property)for $7,000 and used the computer 30% for business.Eric does not use Sec.179.The maximum depreciation deduction for is
A)$210.
B)$420.
C)$700.
D)$2,100.

Question

Quizplus · Accepted Answer

The computer is 5-year property, and using the MACRS depreciation method, the first-year depreciation rate is 20%. Since Eric uses the computer 30% for business, the depreciation deduction is $7,000 x 20% x 30% = $420. However, since Eric does not use Sec. 179, the deduction is limited to the business use percentage, which is $210.

Eric Is a Self-Employed Consultant