You have R&D equipment that is a 5-year MACRS asset that you purchased for $53,500. In...

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You have R&D equipment that is a 5-year MACRS asset that you purchased for $53,500. In February of year 5 of ownership, you s

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Calculation of Depreciation & carrying amount of asset for 5 years

Year	Opening Balance	Rate of Dep as per MACRS GDC Class	Amount of Depreciation	Closing Balance
1	53,500	20%	10,700	42,800
2	42,800	32%	17,120	25,680
3	25,680	19.20%	10,272	15,408
4	15,408	11.52%	6,163	9,245
5	9,245	11.52%	6,164	3,181
6	3,181	5.76%	3,181	0

Carrying Value of Equipment in year 5 = $9,245

Depreciation Claimed till year 4 = $10,700 + 17,120 + 10,272 + 6,164 = $44,256

Sale amount of asset = $5,310

Capital Gain or loss on sale of asset = $5,310 - $9,245 = $3,935

Tax credit on sale of equipment = $3,935 x 35% = $1,377 Approx.

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