Paul bought a computer for $15,000 for business use on March 18,2012.This was his only purchase for that year.Paul used the most accelerated depreciation method available,but did not elect Sec.179. Bonus depreciation was not available.Paul sells the machine in 2014.The depreciation on the computer for 2014 is
A)$0.
B)$1,440.
C)$1,500.
D)$2,880.

Question

Quizplus · Accepted Answer

Since Paul used the most accelerated depreciation method available without electing Sec. 179 or bonus depreciation, he likely used the MACRS 5-year property method. For the year of sale (2014), he would use the half-year convention, which results in 14.4% of the cost being depreciated. Therefore, $15,000 * 14.4% = $2,160, but since it's the year of sale, only half of that amount is allowed, resulting in $1,440.

Paul Bought a Computer for $15,000 for Business Use on March