Barbara's Bakery purchased appliances (7 year property) in quarter 4 of Year 1. The original cost of the appliances was $40,000 and she did NOT use bonus depreciation or Section 179 expensing in the year of purchase. The mid-quarter convention has been used for the calculation of depreciation. If Barbara sells the appliances in March of Year 4, she will be able to deduct $:________.

Respuesta :

Answer:

$703

Explanation:

Calculation for the amount that Barbara will be able to deduct If she sells the appliances in March of Year 4

Purchase value $10,000

MARC rate for 4 years 14.06

Proportion of the year factor- Mid quarter (1.5/12)

Therefore the Depreciation deduction allowed will be:

(40,000 ×14.06%)/12^⁴(1.5)

= $703

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