Income statement: Depreciation: $135,663 Book depreciation is determined using straight-line method, a zero estimated residual value,...

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Income statement: Depreciation: $135,663 Book depreciation is determined using straight-line method, a zero estimated residual value,...

Income statement: Depreciation: $135,663

Book depreciation is determined using straight-line method, a zero estimated residual value, and a full year of depreciation for the year of acquisition. Wildcat purchases and places into service the assets on Jan 1, 2018:

Original Cost	Estimated useful life	MACRS recovery period	Class life
$ 350,627	8 years	7 years	12 years
$ 1,102,023	12 years	5 years	9 years

Wildcat does not use Sec. 179 or bonus depreciation.

What is the the taxable depreciation?

I don't know if toy need this or not? Balance sheet: Depreciable property (net of $135,663) : $ 1,316,987

Thanks!

business accounting

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Answer 1

Answer #1

For calculating taxable depreciation, the MACRS recovery period is considered. The guideline and rates on recovery period is provided by IRS. Accordingly depreciation is calculated as

Quarter of purchase	MACRS recovery period	Depreciation Rate	Original basis	Depreciation
1^st	7 year	14.29%	350627	50105
1^st	5 year	20 %	1102023	220405
Total taxable depreciation				270510

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Answer 2

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Add Answer to: Income statement: Depreciation: $135,663 Book depreciation is determined using straight-line method, a zero estimated residual value,...

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