You are establishing your own company right after school You

You are establishing your own company right after school. You have an investor who helped you get furniture ($11,300) and a computer system with the peripherals ($17,600). Calculate the first year of depreciation of the furniture using the MACRS method.

Solution

Under the MACRS depreciation, the office furniture fall under the category of 7 year class property.

Here, the first year depreciation rate is 14.29%.

So,

MACRS depreciation for first year (furniture) = 11300*14.29%

MACRS depreciation for first year (furniture) = $1614.77