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Willis Company purchased a $3,000, 3 year asset in July of this year. The taxpayer elected...

Willis Company purchased a $3,000, 3 year asset in July of this year. The taxpayer elected out of Section 179 expense deduction and additional depreciation. This was the only asset the company placed in service during the year. Neither the straight line method nor the 150% declining balance method was elected. What is the depreciation for Year 1. A. $222, B. $444. C. $1,000. D. $1,333

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Answer #1

Depreciation Rate in % for Recovery Period under MACRS

Year

Depreciation Rate

1

33.33%

2

44.45%

3

14.81%

4

7.41%

Depreciation in year 1=33%*$3,000=0.33*3000=$1000

ANSWER:

C. $1,000

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