Carl purchased the following assets during the tax year for use in his sole prop
ID: 2585050 • Letter: C
Question
Carl purchased the following assets during the tax year for use in his sole proprietorship: January 6 Equipment $7,400 October 12 Truck 20,000 December 1 Machinery 2,000 Which of the following statements is true? Carl must use half-year convention for the equipment; and must use mid-quarter convention for the truck and machinery Carl must use mid-quarter convention for all assets purchased during the year Carl must use mid-quarter convention for the equipment; and must use half-year convention for the truck and machinery Carl must use half-year convention for all assets purchased during the year Carl can use any convention he wants for any of the assets
Explanation / Answer
Carl must use half-year convention for the equipment; and must use mid-quarter convention for the truck and machinery.
Machinery purchased on Jan 6 so carl can opt for half year convention.
Truck and machinery purchased in fouth quarter so mid quarter convention will be applicable.