Compute Donald MACRS depreciation for the first year

Reference no: EM132165601

Question - Mr. Donald Spade bought a computer in January to keep records on all the property he owns. The computer cost $70,000 and is to be depreciated using MACRS. Donald's accountant pointed out that under a special tax rule (the rule applies when the value of property placed in service in the last 3 months of the tax year exceeds 40% of all the property placed in service during the tax year), the computer and all property that year would be subject to the mid-quarter convention. The mid-quarter convention assumes that all property placed in service in any quarter-year is placed in service at the midpoint of the quarter. Use the mid-quarter convention to compute Donald's MACRS depreciation for the first year.

Reference no: EM132165601

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