Deirdre's business purchased two assets during the current year (a full 12-month tax year). Deirdre placed in service computer equipment (5-year property) on January 20 with a basis of $15,000 and machinery (7-year property) on October 1 with a basis of $15,000. Calculate the maximum depreciation expense, rounded to a whole number (ignoring §179 and bonus depreciation):
A) $1,286
B) $5,144
C) $5,786
D)$6,000
E)None of these

Question

Quizplus · Accepted Answer

The maximum depreciation expense for the computer equipment is $15,000 x 20% x 10/12 = $2,500. The maximum depreciation expense for the machinery is $15,000 x 14.29% x 3/12 = $3,286. The total maximum depreciation expense is $2,500 + $3,286 = $5,786.

Deirdre's Business Purchased Two Assets During the Current Year (A