The Client Is a Corporation Which Uses High- Tech Equipment

question 1137

Multiple Choice

The client is a corporation which uses high- tech equipment to manufacture its product. Because of the high level of wear and tear due to long production runs and frequent technology changes, the client usually replaces the equipment every two years. According to IRS guidance, the MACRS life of the equipment is five years. In order to accelerate depreciation deductions, which tax depreciation option should the client elect?

• A) MACRS with a straight- line election
• B) alternative depreciation system (ADS)
• C) units- of- production method
• D) regular MACRS treatment

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