Shannon purchases equipment classified as 3-year property on December 19,2016,at a cost of $100,000.Section 179 is not elected and Shannon does not use the straight-line method.Shannon purchased no other depreciable property in 2016.What is the amount of the MACRS depreciation deduction for 2016?

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Since Shannon did not elect Section 179, she cannot expense the cost of the equipment or take bonus depreciation. Therefore, she must use MACRS depreciation. According to the MACRS tables, 3-year property is depreciated over 3 years using the 200% declining balance method. However, Shannon did not use the straight-line method, so she would use the 200% declining balance method instead. Using the mid-quarter convention (since the equipment was purchased in the fourth quarter), the depreciation deduction for 2016 would be $8,330.

Shannon Purchases Equipment Classified as 3-Year Property on December 19,2016,at