Problem 8-8
Modified Accelerated Cost Recovery System (MACRS), Election to
Expense, Listed Property, Limitation on Depreciation of Luxury
Automobiles (LO 8.2, 8.3, 8.4, 8.5)
During 2018, William purchases the following capital assets for use in his catering business:
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Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation.
Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.
Calculate William's maximum depreciation deduction for 2018,
assuming he uses the automobile 100 percent in his business.
$___________________
Problem 8-8 (Algorithmic)
Modified Accelerated Cost Recovery System (MACRS), Election to
Expense, Listed Property, Limitation on Depreciation of Luxury
Automobiles (LO 8.2, 8.3, 8.4, 8.5)
During 2018, William purchases the following capital assets for use in his catering business:
|
Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate taxable income.
Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.
Calculate William's maximum depreciation deduction for 2018,
assuming he uses the automobile 100 percent in his business.
$______________________
Problem 8-10
Modified Accelerated Cost Recovery System (MACRS), Listed Property,
Limitation on Depreciation of Luxury Automobiles
(LO 8.2, 8.4, 8.5)
On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $43,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179.
Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.
Calculate Jay's depreciation deduction for 2018 assuming bonus
depreciation.
$______________
Problem 8-8 Modified Accelerated Cost Recovery System (MACRS), Election to Expense, Listed Property, Limitation on Depreciation...
During 2018, William purchases the following capital assets for use in his catering business: New passenger automobile (September 30) $52,900 Baking equipment (June 30) 15,870 Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate...
Problem 8-3 Modified Accelerated Cost Recovery System (MACRS), Election to Expense (Section 179) (LO 8.2, LO 8.3) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2018. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,000 and an estimated useful life of 5 years. Assume half-year convention...
roblem 8-3 Modified Accelerated Cost Recovery System (MACRS), Election to Expense (Section 179) (LO 8.2, 8.3) Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on March 30, 2019. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $42,000 and an estimated useful life of 5 years. Assume half-year convention for...
Problem 8-9 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS), Listed Property (LO 8.2, 8.4) On February 2, 2018, Alexandra purchases a personal computer for her home. The computer cost $6,280. Alexandra uses the computer 80 percent of the time in her accounting business, and the remaining 20 percent of the time for various personal uses. Calculate Alexandra's maximum depreciation deduction for 2018 for the computer, assuming half-year convention and she does not make the election to expense or take bonus...
Question: Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, ... Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, 2018, Holly purchased a residential apartment building. The cost basis assigned to the building is $195,400. Holly also owns another residential apartment building that she purchased on December 15, 2018, with a cost basis of $790,000. Click here to access the depreciation tables. If required, round intermediate calculations and final...
Problem 8-46 (Algorithmic) (LO. 4) On April 30, 2018, Leo purchased and placed in service a new car that cost $63,000. The business use percentage for the car is always 100%. He does not take the additional first-year depreciation or any § 179. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car?...
MACRS, or the Modified Accelerated Cost Recovery System is the current tax depreciation system in the US. It assigns a schedule for yearly depreciation, depending on the type of property. Assume you are considering the purchase of a new $1756 laptop. Computers are to be depreciated as follows: 20% in year 1, 32% in year 2, 19.2% in year 3, 11.52% in years 4 and 5, and the final 5.76% in year 6. How much will your computer have been...
Problem 8-46 (Algorithmic) (LO. 4) On April 30, 2017, Leo purchased and placed in service a new car that cost $20,500. The business use percentage for the car is always 100%. He does take the additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? Half-year b. Is the automobile...
Problem 8-46 (Algorithmic) (LO. 4) On March 30, 2018, Leo purchased and placed in service a new car that cost $64,200. The business use percentage for the car is always 100%. He does not take the additional first-year depreciation or any 179. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS Convention applies to the new car? Half-year...
Problem 8-46 (Algorithmic) (LO. 4) On July 15, 2018, Leo purchased and placed in service a new car that cost $67,800. The business use percentage for the car is always 100%. He does not take the additional first-year depreciation or any $ 179. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car?...