Exhibit 11-05 Wilson Is Preparing His Tax Returns Using the MACRS Convention

question 9

Multiple Choice

Exhibit 11-05
Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the Asset
-Refer to Exhibit 11-05, what amount of depreciation would have been recorded in Wilson's books for year 3?

• A) $18,000
• B) $12,857
• C) $20,160
• D) $15,000

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Definitions:

Reconstruction

Refers to the period following the Civil War in which the United States government focused on rebuilding the Southern states and reintegrating them into the Union.

Post-Civil War

Refers to the period immediately following the end of the American Civil War, marked by reconstruction efforts, societal changes, and attempts to integrate formerly enslaved people into society.

Cotton

A soft, fluffy staple fiber that grows in a boll around the seeds of cotton plants, historically significant as a major driver of the economy, especially in the American South.