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Yasmin purchased two assets during the current year. Yasmin placed in service computer equipment (5-year property)...

Yasmin purchased two assets during the current year. Yasmin placed in service computer equipment (5-year property) on May 26th with a basis of $10,000 and macinery (7-year property) on December 9th with a basis of $10,000. Calculate the maximum depreciation expense (ignoring $179 and bonus depreciation ) (Use MACRS table 2).

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Answer #1
As more than 40% of the property was placed in service during the fourth quarter, the mid-quarter convention applies.
Depreciation on computer equipment = 10000*0.25 = $2500
Depreciation on machinery = 10000*0.0357 = $357
Maximum depreciation expense = 2500+357 = $2857
Note: The depreciation percentage on Computer equipment for first year using Double declining depreciation rate is 25%
Note: The depreciation percentage on Machinery for first year using Double declining depreciation rate is 3.571%
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