Beth's Business Purchased Only One Asset During the Current Year

question 105

Multiple Choice

Beth's business purchased only one asset during the current year (a full 12-month tax year) . On December 1 Beth placed in service machinery (seven-year property) with a basis of $50,000. Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation) . (Use MACRS Table 2.)

• A)$1,785
• B)$2,500
• C)$7,145
• D)$10,000
• E)None of the choices are correct.

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Definitions:

Federal Statutes

Laws enacted by the federal government of a country.

State Statutes

Laws established by a state government that prescribe or prohibit certain actions, governing the behavior of individuals and organizations within that state.

Issuing Stock

The process by which a company sells new shares to investors to raise capital, often through a public offering.

Corporation

A legal entity separate from its owners, with rights to own property, incur liabilities, and sell shares.