Exercise 8-25 (LO. 4) On April 5, 2020, Kinsey places in service a new automobile that cost $60,000. He does not elect § 179 expensing, and he elects not to take any available additional first-year depreciation. The car is used 70% for business and 30% for personal use in each tax year. Kinsey chooses the MACRS 200% declining-balance method of cost recovery (the auto is a 5-year asset). Click here to access the depreciation table to use for this problem. Assume the following luxury automobile limitations: year 1: $10,100; year 2: $16,100. Compute the total depreciation allowed for: 2020: $fill in the blank 1 2021: $fill in the blank 2 Exhibit 8.5 MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year Convention For Property Placed in Service after December 31, 1986 Other Recovery Years Last Recovery Year MACRS Class % First Recovery Year Years % Year % 3-year 16.67 2–3 33.33 4 16.67 5-year 10.00 2–5 20.00 6 10.00 7-year 7.14 2–7 14.29 8 7.14 10-year 5.00 2–10 10.00 11 5.00 15-year 3.33 2–15 6.67 16 3.33 20-year 2.50 2–20 5
Exercise 8-25 (LO. 4) On April 5, 2020, Kinsey places in service a new automobile that cost $60,000. He does not elect § 179 expensing, and he elects not to take any available additional first-year depreciation. The car is used 70% for business and 30% for personal use in each tax year. Kinsey chooses the MACRS 200% declining-balance method of cost recovery (the auto is a 5-year asset). Click here to access the depreciation table to use for this problem. Assume the following luxury automobile limitations: year 1: $10,100; year 2: $16,100. Compute the total depreciation allowed for: 2020: $fill in the blank 1 2021: $fill in the blank 2 Exhibit 8.5 MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year Convention For Property Placed in Service after December 31, 1986 Other Recovery Years Last Recovery Year MACRS Class % First Recovery Year Years % Year % 3-year 16.67 2–3 33.33 4 16.67 5-year 10.00 2–5 20.00 6 10.00 7-year 7.14 2–7 14.29 8 7.14 10-year 5.00 2–10 10.00 11 5.00 15-year 3.33 2–15 6.67 16 3.33 20-year 2.50 2–20 5
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 27CE: LO.4 On April 5, 2019, Kinsey places in service a new automobile that cost 60,000. He does not elect...
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Exercise 8-25 (LO. 4)
On April 5, 2020, Kinsey places in service a new automobile that cost $60,000. He does not elect § 179 expensing, and he elects not to take any available additional first-year
Click here to access the depreciation table to use for this problem.
Assume the following luxury automobile limitations: year 1: $10,100; year 2: $16,100.
Compute the total depreciation allowed for:
| 2020: | $fill in the blank 1 |
| 2021: | $fill in the blank 2 |
Exhibit 8.5
MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year Convention
| For Property Placed in Service after December 31, 1986 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Other Recovery Years | Last Recovery Year | |||||||||
| MACRS Class | % First Recovery Year | Years | % | Year | % | |||||
| 3-year | 16.67 | 2–3 | 33.33 | 4 | 16.67 | |||||
| 5-year | 10.00 | 2–5 | 20.00 | 6 | 10.00 | |||||
| 7-year | 7.14 | 2–7 | 14.29 | 8 | 7.14 | |||||
| 10-year | 5.00 | 2–10 | 10.00 | 11 | 5.00 | |||||
| 15-year | 3.33 | 2–15 | 6.67 | 16 | 3.33 | |||||
| 20-year | 2.50 | 2–20 | 5 |
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