Question

When solving for 2019 Tax Year, please ASSUME that the real property was placed in business after May 13,1993

46. At the beginning of the year, Poplock began a calendar-year dog boarding business called Griff's Palace. Poplock bought and placed in service the following assets dur- ing the year: Asset Date Acquired Cost Basis Computer equipment Dog-grooming furniture Pickup truck Commercial building Land (one acre) 3/23 5/12 9/17 10/11 10/11 $ 5,000 7,000 10,000 270,000 80,000 Assuming Poplock does not elect 8179 expensing and elects not to use bonus depre- ciation, answer the following questions: a) What is Poplock's year 1 depreciation deduction for each asset? b) What is Poplock's year 2 depreciation deduction for each asset?

Answer 1

Answer:

a)

Asset	Purchase Date	Quarter	Recovery period	Original Basis	Rate	Depreciation
Computer equipment	3/23	1st	5 years	$5,000	20.00%	$1,000
Dog grooming furniture	5/12	2nd	7 years	$7,000	14.29%	$1,000
Pickup truck	9/17	3rd	5 years	$10,000	20.00%	$2,000
Commercial building	10/11	4th	39 years	$270,000	0.535%	$1,445
Total						$5,445

Note:
Depreciation = Original Basis x Rate

b.)

Asset	Purchase Date	Quarter	Recovery period	Original Basis	Rate	Depreciation
Computer equipment	3/23	1st	5 years	$10,000	32.00%	$1,600
Dog grooming furniture	5/12	2nd	7 years	$7,000	24.49%	$1,714
Pickup truck	9/17	3rd	5 years	$10,000	32.00%	$3,200
Commercial building	10/11	4th	39 years	$270,000	2.564%	$6,923
Total						$13,437

Note:
Depreciatiom = Original Basis x Rate