Question

A. For the properties listed below compute the depreciation taken during the useful life of the property for all depreciable years assuming the half year convention applies. Assume that all property is post-1986 property.

B. Include columns for the applicable AMT depreciation along with the AMT adjustment.

PROPERTY Recovery Period, 3 3 Tractor unit Race horse over 2 years old Computer Luxury Automobile General Purpose Truck Office Desk Office Safe Light Boat Petroleum Refining Instalation Residental Rental Building Nonresidental Rental Building PLACED COST IN SERVICE 19.000 15 Feb 54,000 12 May 4,000 25 Nov 67,800 15 May 25,000 13 Oct 7,300 5 Jan 4,6007 Sept 69,700 27 July 154,000 15 June 10,790,000 26 April 13,000,000 20 Nov 10 10 27.5 39.5

Suggested Columns

Asset Description

Date Placed in Service

Cost Basis

Recovery Rate

MACRS Recovery Amount

MACRS Accumulated

Depreciation

Adjusted Basis

AMT Rate

Answer 1

Asset Description	Date placed in service	Cost basis	Recovery rate =(200%/recovery period)	MACRS recovery amount	MACRS Accumulated	Depreciation (8%)	Adjusted Basis (MACRS recovery-Depreciation)	AMT Rate
Tractor Unit	15Feb	19000	66.67%	12667.3	0	1520	11147.3	18.5%
Race Horse	12 Feb	54000	66.67%	36001.8		4320	31681.8	18.5%
Computer	25 Nov	4000	40%	1600		320	1280	18.5%
Luxury Automobile	15 May	67800	-	-		-	-	-18.5%
General Purpose truck	13 Oct	25000	40%	10000		2000	8000	18.5%
Office desk	5 Jan	7300	28.57%	2085.61		584	1501.61	18.5%
Office safe	7 Sept	4600	28.57%	1314.22		368	946.22	18.5%
Light Boat	27th July	69700	20%	13940		5576	8364	18.5%
Petroleum refining installation	15 June	154000	20%	30800		12320	18480	18.5%
Residential rental	26 April	10790000	7.27%	784433		863200	-78767	18.5%
Non-residential rental	20 Nov	13000000	5.06%	657800		1040000	-382200	18.5%