A)The first and last years of MACRS depreciation deductions for a 5-year asset c

Question

A)The first and last years of MACRS depreciation deductions for a 5-year asset costing $10,000 using the half-year convention are:

a. $2,000 and $576

b. $2,000 and $1,000

c. $2,000 and $1,152

d. $2,000 and $2,000

B)

Fred,      age     44,      wants            to        contribute   the     maximum    allowed        to        a          Roth IRA     in        2017.     He       is         single and    his      AGI     is         $121,000.    How     much can     he       contribute   to        the      Roth IRA?   a.     $3,300         

b. $4,400

c.   $5,500         

$6,500

Explanation / Answer

The table to use is MACRS--Half-Year Convention.

The rate to use for the first year is 20%. Thus, the depreciation is $2,000 (20% of $10,000).

The rate to use for the last year is 11.52%. Thus, the depreciation is $1152 (11.52% of $10,000).

The Ans is: c

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