During 2014, Duncan Company Purchases and Places in Service Office

question 18

Multiple Choice

During 2014, Duncan Company purchases and places in service office equipment with a cost of $40,000. The equipment is 7-year MACRS property with an ADS recovery period of 10 years. Duncan desires to avoid the AMT. What is its minimum 2014 depreciation deduction?

• A) $ 2,000
• B) $ 2,857
• C) $ 3,000
• D) $ 4,000
• E) $ 5,714

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Definitions:

Chapter 13

A type of bankruptcy in the United States that allows individuals with a regular income to develop a plan to repay all or part of their debts.

Bankruptcy Relief

Legal protection granted to individuals or entities that are unable to repay their debts, allowing them to restructure or eliminate obligations under the supervision of a bankruptcy court.

Chapter 7

A type of bankruptcy under U.S. law that involves liquidating a debtor's assets to repay creditors.

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize their debts and continue operating.