Deirdre's business purchased two assets during the current year (a full 12-month tax year). deirdre placed in service computer equipment (5-year property) on january 20 with a basis of $15,000 and machinery (7-year property) on september 1 with a basis of $15,000. calculate the maximum depreciation expense, (ignoring §179 and bonus depreciation). (use macrs half-year convention) (round final answer to the nearest whole number.)
a. $6,000.
b. $5,144.
c. $1,286.
d. $5,786.
e. none of the choices are correct.

D. $5,786.

Explanation:

The mid-quarter convention applies, so the calculation of property and the machinery is 4 quarter property.

depreciation expense on property = $15000*0.35

                                                          = $2520

depreciation expense on machinery = 15000*0.0357

                                                             = $536

total depreciation expense = $5250 + $536

                                             = $5786

Therefore, The maximum depreciation expense, (ignoring §179 and bonus depreciation). (Use MACRS Half-Year Convention)  is $5786

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