Sairra LLC purchased only one asset during the current year (a full 12-month tax year). On April 16 Sairra placed in service furniture (seven-year property) with a basis of $40,000. Calculate the maximum depreciation expense for the current year, rounding to a whole number (ignoring §179 and bonus depreciation):

a. $2.,358.

b. $5,606.

c. $4,716

d. $6,600.

e. none of the choices are correct.

e. none of the choices are correct.

Therefore the right answer is $5,716

Explanation:

Calculation of the maximum depreciation expense for the current year of Sairra LLC,

Since the asset's recovery period was 7 years in whichh the half-year convention also applies.

The calculation will therefore be:

Basis of $40,000 * 0.1429

= $5,716

Therefore the maximum depreciation expense for the current year will be $5,716