In November 2016, Sue purchased a computer to use exclusively in her home business. She...
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Accounting
In November 2016, Sue purchased a computer to use exclusively in her home business. She depreciated it using the regular MACRS method with the mid-quarter convention. She had not taken a 179 expense deduction. In June 2017, she discovered she needed a better computer, so she gave her old computer to a local recycler, and purchased a new one. What happens with the depreciation on the first computer?
Depreciation is computed for the year and then she is allowed 87.5% of that amount on her 2017 return.
Sue can claim the depreciation for the entire year.
Depreciation is computed for the year, and then Sue is allowed 37.5% of that amount on her 2017 return.
She is able to claim 50% of the year's depreciation since she used the computer for six months of the year.
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