Sairra, LLC purchased only one asset during the current year (a full 12-month tax year). Sairra placed in service furniture (7-year property) on April 16 with a basis of $25,000. Calculate the maximum depreciation expense for the current year, rounding to a whole number (ignoring §179 and bonus depreciation):
A) $1,786
B) $3,573
C) $4,463
D)$5,000
E)None of these

Question

Quizplus · Accepted Answer

The maximum depreciation expense is calculated using the MACRS half-year convention for 7-year property. The applicable rate for the first year is 14.29%. Therefore, $25,000 * 14.29% = $3,573.

Sairra, LLC Purchased Only One Asset During the Current Year