Mainstream Company purchased depreciable equipment in 2016 for $119,000 and claimed a Sec. 179 deduction of...

Mainstream Company purchased depreciable equipment in 2016 for $119,000 and claimed a Sec. 179 deduction of $112,000 but no bonus depreciation. The equipment qualified as 5-year property under MACRS. Mainstream sold all of this equipment on June 30, 2015. What is the amount of Mainstream's MACRS deduction for 2017?
A. $0
B. $1,120
C. $2,240
D. $4,480

Solutions

Expert Solution

Correct answer is B.

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MACRS depreciation for second year = 32%

Since asset is sold in mid year half of the depreciation 16% will be charged

Depreciation in second year = [(asset cost – 179 deduction)*.16]

= [(119000 – 112000)* .16]

= 1120

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Hope this answer your query.

Feel free to comment if you need further assistance. J

ekkarill92 answered 1 year ago

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