Five year property costing $25,000 was placed in service on January 11, 2020 and $75,000 of five year property was also placed in service on December 4, 2020. All property is depreciated using MCRS. Neither IRC 179 nor bonus depreciation is claimed. What will be the 2020 depreciation deductible for $25,000 asset? A 630 B 5,000 C 3,050 D 12,500 E None of the above
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Five year property costing $25,000 was placed in service on January 11, 2020 and $75,000 of five year property was also placed in service on December 4, 2020. All property is
A 630
B 5,000
C 3,050
D 12,500
E None of the above
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