. Which of the following statements is incorrect?
A. MACRS (Modified Accelerated Cost Recovery System) does not allow cost recovery deduction on personal-use property.
B. Cost recovery period on land is either 27.5 years or 39 years.
C. For both business car and business building, taxpayer can choose either straight-line (SL) or declining balance (DB) cost recovery method.
D. The date an asset is placed in service is more important than the date an asset is purchased in determining the cost recovery period.
E. Taxpayers must use the mid-month convention for depreciating realty.
During 2021, Rooster (calendar taxpayer) acquires and places the following properties in service.
Property Property Placement Date Cost Recovery period
Business copy machine May 12, 2021 $7,000 5 years
Business furniture November 15, 2021 $10,000 7 years
Assume that (1) Rooster chooses declining balance (DB) cost recovery method, and (2) Rooster does not elect Sec. 179 deduction and does not claim for 100% additional first-year cost recovery deduction. Determine Rooster’s cost recovery deduction for 2021.
A. $2,107 B. $5,750 C. $6,250 D. $3,857 E. $1,407