Ink Masters Printing purchased a new printing press for $660,000 on February 9.2010. The press is used for business 90% of the time. As the accountant for the company, you elected to lake a $100,000 Section 179 deduction. The press also qualified for a special depreciation allowance. (Sec Table 17-4.)
a. What was the basis for depreciation of the printing press?
Business-use basis =
Tentative basis = 594.000 - 100,000 = $494.000
The asset qualifies for a 50% special depreciation allowance (Table 17-4).
Basis for depreciation = 494.000 (100% -50%) = $247,000
b. What was the amount of the third year's depreciation using MACRS?
Printing presses are in the 7-year property class (Table 17-1).
Third-year depreciation = 17.49% (Table 17-2)
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