When fully depreciating 7-year property, the final year of depreciation will be year:
A)5
B)6
C)7
D)8

Question

Quizplus · Accepted Answer

Under the Modified Accelerated Cost Recovery System (MACRS), which is used in the United States to depreciate property for tax purposes, the final year of depreciation for 7-year property actually extends into the 8th year. This is because MACRS uses a half-year convention for most property, meaning only a half-year's worth of depreciation is claimed in both the first and last years of the recovery period.

When Fully Depreciating 7-Year Property, the Final Year of Depreciation