What is the maximum amount of depreciation deduction

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Question - Harris Corp. is a technology start-up and is in its second year of operations. The company didn't purchase any assets this year but purchased the following assets in the prior year:

Asset

Placed in Service

Basis

Office equipment

August 14

$10,000

Manufacturing equipment

April 15

68,000

Computer system

June 1

16,000

Total


$94.000

Harris did not know depreciation was tax deductible until it hired an accountant this year and didn't claim any depreciation deduction in its first year of operation.

Required -

a) What is the maximum amount of depreciation deduction Harris Corp. can deduct in its second year of operation?

b) What is the basis of the office equipment at the end of the second year?

Reference no: EM133131337

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