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26 December, 03:49

An asset is placed in service on May 15, 2019 and has a depreciable basis of $40,000. The asset is in the 7-year recovery class and the half-year convention applies. What is the maximum depreciation deduction that may be claimed for 2019, excluding the election to expense and bonus depreciation?

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  1. 26 December, 07:41
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    The maximum amount allowable is $5716.

    Explanation:

    The depreciation rate at the MARCS table for the 7 years in recovery period is 14.29%. Which means that the most depreciation that is deductable is 14.29% of the depreciation basis.

    The maximum amount of the depreciation amount = $40,000 * 14.29% = $5716
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