On April 12,2013,Suzanne bought a computer for $20,000 for business use.This was the only purchase for that year.Suzanne used the most accelerated depreciation method available but did not elect Sec.179.Bonus depreciation was not available.Suzanne sells the machine in 2014.The depreciation on the computer for 2014 is
A)$2,000.
B)$3,200.
C)$4,000.
D)$6,400.

Question

Quizplus · Accepted Answer

Suzanne used the most accelerated depreciation method available, which is the MACRS 200% declining balance method for 5-year property. In the second year (2014), the depreciation rate is 32%, so $20,000 * 32% = $6,400. However, since she sells the machine in 2014, she must use the half-year convention, resulting in $6,400 / 2 = $3,200.

On April 12,2013,Suzanne Bought a Computer for $20,000 for Business