Question

The mid-quarter convention applies to a $10,000, 5-year asset acquired in the second quarter of the...

The mid-quarter convention applies to a $10,000, 5-year asset acquired in the second quarter of the current year. The taxpayer elected out of Section 179 expense deduction and additional depreciation. Neither straight-line nor the 150% declining balance method was elected. What is the depreciation percentage for the first year? A. 20%, B. 25%, C. 35%, D. 41.67%

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Answer #1

HERE ANSWER IS B. 25%

AS MID QUARTER CONVENTION IS APPLICABLE

IT IS A 5 YEAR PROPERTY

PLACED IN SERVICE IN SECOND QUARTER

HERE TABLE A-3 WILL BE APPLICABLE

Table A-3 RATE FOR 5 YEAR PROPERTY ARE ENLISTED BELOW FOR REFERENCE

Mid-quarter Convention

Placed in Service in Second Quarter—Declining Balance

Depreciation rate for recovery period

YEAR  5-year

1 25.00%

2 30.00

3 18.00

4. 11.37

5 11.37

6 4.26

FEEL FREE TO ASK ANY CLARIFICATION IF ANY REQUIRED, AND PLEASE GIVE FEEDBACK BY THUMBS UP IF SATISFIED IT WILL BE HIGHLY APPRECIATED

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