Question

how to do depreciation? Can you please give me one example of this of where putting the stuff at and i can do the rest. I am very confuse.

V Assets Acquired in 2017 (This section may be helpful to fill out by hand first) Wolf P. purchased the following assets, all placed in service on 01/01/2017. Wolf P Inc. has elected out of Bonus Depreciation. Asset Cost New Kitchen Equipment Furniture Computers and software $350,000 $35,000 $12,000 $24,000 Food Truck (not luxury) VI.Assets Acquired in 2018 (This section may be helpful to fill out by hand first) Wolf P purchased the following assets, all placed in service on 6/30/2018. TRPP, Inc. has elected out of Bonus Depreciation. Asset Cost $45,000 $100,000 New Dishwasher 2018 Lexus. PartIl MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2018 . .. .. 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B-Assets Placed in Service During 2018 Tax Year Using the General Depreciation System (b) Month and yearc) Basis for depreciation only-see instructions) Recovery (e) ConventionMethod(a) d erou seis inastmn (g) Depreciation deduction (d) Recovery period a) Classification of propertyplaced in 19a 3-year property service 5-year property b 7-yearproperty- с e 15-year property f 20-year property g 25-year property S/L S/L S/L S/L S/L 25 yrs 27.5 yrs. 27.5 h Residential rental ro 39 yrs i Nonresidential real property Section C-Assets Placed in Service During 2018 Tax Year Using the Alternative Depreciation System S/L S/L S/L S/L 20a Class life b 12-yea с 30-year 12 30 yrs 40 yrs.MM

Answer 1

There are two types of system for MACRS depreciation:

1) General Depreciation System

2) Alternate Depreciation System

Alternate Depreciation System is used when one or more assets are purchased out of the following:

1. Listed property used 50% or less in a qualified business use.
2. Tangible property used outside the Country during the year.
3. Any tax-exempt property.
4. Any tax-exempt bond-financed property. & more conditions

After determining of the System, we need to classify the asset:

1) Half Year Convention

2) Mid month Convention

3) Mid Quarter Convention

After determining it, we need need to find out the life of Asset.

Like Computer has life of 5 Years.

Depreciation rate =20%

Depreciation= 12000*20%= 2,400