Question

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table 5.) Date Placed Original Asset in Service Basis Machinery 25-Oct $ 78,000 Computer equipment 03-Feb $ 18,000 Used delivery truck* 17-Mar $ 31,000 Furniture 22-Apr $ 158,000 Total $ 285,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new flooring (qualified improvement property) to its office building on May 12 at a cost of $380,000. b. What is the allowable MACRS depreciation on Convers's property in the current year assuming Convers does not elect out of bonus depreciation (but does not take §179 expense)

Answer 1

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Answers is highlighted in yellow: Solution Answer: b 291099 Explanation: Half year convention will be used 100% 179 Ded. Balance LifeRate De 71 14.29% $ 5| 20.00%) $ 20.00%) $ Quarter 4th 1st Computer Equipment (5 years) 1st 2nd Furniture (7 year) 2nd Assets Amount Balance Bonus s 78,000 S $18,000 $ S 31,000$31,000 $ $1,58,000 1,58,000$ $3,80,000 78,000 $ 18,000 $ Machinery (7 year) Used delivery truck (5 year) 71 14.25% 3,80,000 $ |$3,80,000|391.605%) $ Qualified Improvement (39 Years) Bonus Depreciation 179 Deduction Depreciation Expense 6,099 $ 2,85,000 285000 291099

Answer 2

Ans = total assets

bonus depreciation also applies to updates and remodeling to nonresidential  buildings (the $380,000 new flooring)