On August 3,2013,Yang purchases office furniture (7-year property)costing $21,000 for use in her business.She does not wish to use the Section 179 election,elects out of bonus depreciation,and makes the election to use the straight-line method over the MACRS recovery period.What is Yang's 2013 cost recovery deduction?

Question

Quizplus · Accepted Answer

Since Yang elected to use the straight-line method over the MACRS recovery period for 7-year property, the cost recovery deduction for the first year is calculated using the half-year convention. The straight-line rate for 7-year property is 1/7, and with the half-year convention, the deduction is $21,000 * (1/7) * (1/2) = $1,500.

On August 3,2013,Yang Purchases Office Furniture (7-Year Property)costing $21,000 for Use