Florida General Contractor Practice Exam

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Prepare for the Florida General Contractor Exam. Study with flashcards and multiple choice questions, each question includes hints and explanations. Get exam-ready now!

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Under MACRS rules, how many years of useful life is allocated to office furniture?

5 years
7 years
10 years
15 years

The correct answer is: 7 years

Under the Modified Accelerated Cost Recovery System (MACRS), office furniture is classified under a specific asset class that determines its useful life for depreciation purposes. According to MACRS guidelines, office furniture is typically assigned a useful life of 7 years. This classification aligns with the broader categories established by the IRS, which group various types of property and their corresponding recovery periods. The 7-year recovery period applies to most types of office furniture and fixtures, allowing businesses to recoup their costs more quickly through accelerated depreciation methods. By understanding this classification and its implications, contractors and businesses can make informed decisions regarding asset purchases and financial planning. Knowing the correct recovery period is vital for tax reporting and maximizing depreciation benefits.