Aaron purchases a taxicab (5-year MACRS property)for $20,000 on December 3,2013.This is the only business asset Aaron acquires in 2013.He does not desire to use the Section 179 election,and he elects out of bonus depreciation.What is the maximum amount of depreciation that he can deduct in 2013?

Question

Quizplus · Accepted Answer

Since the taxicab is a 5-year MACRS property and was placed in service in the last quarter of the year, the mid-quarter convention applies. The depreciation rate for the first year under the mid-quarter convention for 5-year property is 5%. Therefore, $20,000 x 5% = $1,000.

Aaron Purchases a Taxicab (5-Year MACRS Property)for $20,000 on December