Question

Bob's Burgers purchased only one asset during the current year (a full 12-month tax year ending...

Bob's Burgers purchased only one asset during the current year (a full 12-month tax year ending on Dec. 31), some machinery for use in the business. On December 1, Bob's Burgers placed the machinery (seven-year property) in service with an initial basis of $71,000. Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation).

A. $2535

B. $3550

C. $10145

D. $14200

E. None of the choices are correct.

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Answer #1

Correct option is A : $2535

Bob's Burgers purchased only one asset during the current year

On December 1, Bob's Burgers placed the machinery (seven-year property) = 7 years

initial basis amount =  $71,000.

Calculating the maximum depreciation expense

71,000 x 3.57%

2,534.7 or 2,535

Note ;

3.57% was took from MACRS table

Any doubt comment below i will explain or resolve until you got....
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