Anne LLC purchased computer equipment (5-year property) on August 29 for $30,000 and used the half-year convention. Anne LLC did not take §179 or bonus depreciation in the year it acquired the computer equipment. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense. (Use MACRS Table 1)
A) $432.
B) $1,728.
C) $1,874.
D) $3,456.
E) None of the choices are correct.

Question

Anne LLC purchased computer equipment (5-year property) on August 29 for $30,000 and used the half-year convention. Anne LLC did not take §179 or bonus depreciation in the year it acquired the computer equipment. During the current year, which is the fourth year Anne LLC owned the property, the property was disposed of on January 15. Calculate the maximum depreciation expense. (Use MACRS Table 1)
A) $432.
B) $1,728.
C) $1,874.
D) $3,456.
E) None of the choices are correct.

Quizplus · Accepted Answer

The calculations are $30,000 × 0.1152 = $3,456 × 0.5 = $1,728 since the property is considered to be owned for half the year in the year of disposition.

Anne LLC Purchased Computer Equipment (5-Year Property) on August 29