Question 2 of 20. Using the haif-year convention, computo the MACRS depreciation

Question

Question 2 of 20. Using the haif-year convention, computo the MACRS depreciation doduction for the third year of a fax machine ting $500. The machine was used oxclusively for business and no bonus depreciation was claimed cost O $58 Soo a $87 o $96 Mark for follow up uestion 3 of 20. Myka reorganized her office and purchased a new office desk for $3,300 on March 17, 2015. Myka does not want to take any section 179 expense deduction, but will take the bonus depreciation. Compute Myka's 2015 depreciation amount after the bonus depreciation is taken. O $83 330 $165 $236 o $471 less S0% lloso leso lleSb X 14.29%,

Explanation / Answer

Ans : Depreciation for office desk comes in office furniture category which is 7 year property class.

Since it is purchased and put to use in 2015 itself section 179 deduction and Bonus depreciation is allowed. But as per the problem Myka doesn’t want to go for section 179. Therefore bonus depreciation @ 50% is applicable on it.

Asset amount                 = $ 3300

Bonus dep. @ 50%        = $ 3300 * 50 /100

                                       =   $ 1650

Remaining asset value = $3300 - $ 1650 = $ 1650

Regular depreciation for a office desk is applicable under MACRS rule of 7 year property on the remaining property amount after bonus depreciation :

= $ 1650 * 14.29% ( as per Table A – 1 of MACRS depreciation schedule for half year convention in the first year percentage allowed is 14.29%)

= $235.78 rounded up = $236

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.