Wellington Company purchases a new warehouse on August 24,2005,for $1,000,000 (exclusive of the cost allocated to the land).What is the 2016 MACRS depreciation deduction?

Question

Quizplus · Accepted Answer

The warehouse is a nonresidential real property, which falls under the MACRS category of 39 years. The applicable MACRS table for mid-month convention and 39-year property shows a depreciation percentage of 2.564% for the 11th year of the property's life. Using this percentage on the depreciable basis ($1,000,000), we get a depreciation deduction of $25,640 for 2016. Therefore, option B is the correct answer.

Wellington Company Purchases a New Warehouse on August 24,2005,for $1,000,000