AMP Corporation (calendar year-end) has 2021 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2021, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Placed in Service Basis Machinery September 12 $ 1,530,000 Computer equipment February 10 485,000 Office building April 2 600,000 Total $ 2,615,000 b. What is the maximum total depreciation, including §179 expense, that AMP may deduct in 2021 on the assets it placed in service in 2021, assuming no bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
AMP Corporation (calendar year-end) has 2021 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2021, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Placed in Service Basis Machinery September 12 $ 1,530,000 Computer equipment February 10 485,000 Office building April 2 600,000 Total $ 2,615,000 b. What is the maximum total depreciation, including §179 expense, that AMP may deduct in 2021 on the assets it placed in service in 2021, assuming no bonus depreciation? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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AMP Corporation (calendar year-end) has 2021 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2021, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
| Asset | Placed in Service | Basis |
|---|---|---|
| Machinery | September 12 | $ 1,530,000 |
| Computer equipment | February 10 | 485,000 |
| Office building | April 2 | 600,000 |
| Total | $ 2,615,000 |
b. What is the maximum total
Transcribed Image Text:**Table 1: MACRS Half-Year Convention**
This table provides the depreciation rates for different recovery periods based on the Modified Accelerated Cost Recovery System (MACRS) using the half-year convention. It outlines how different types of assets are depreciated over specified periods.
| Year | 3-Year | 5-Year | 7-Year | 10-Year | 15-Year | 20-Year |
|-------|--------|--------|--------|---------|---------|---------|
| Year 1 | 33.33% | 20.00% | 14.29% | 10.00% | 5.00% | 3.750% |
| Year 2 | 44.45 | 32.00 | 24.49 | 18.00 | 9.50 | 7.219 |
| Year 3 | 14.81 | 19.20 | 17.49 | 14.40 | 8.55 | 6.677 |
| Year 4 | 7.41 | 11.52 | 12.49 | 11.52 | 7.70 | 6.177 |
| Year 5 | | 11.52 | 8.93 | 9.22 | 6.93 | 5.713 |
| Year 6 | | 5.76 | 8.92 | 7.37 | 6.23 | 5.285 |
| Year 7 | | 8.93 | 6.55 | 5.90 | 4.888 | |
| Year 8 | | 4.46 | 6.55 | 5.90 | 4.522 | |
| Year 9 | | 6.56 | 5.91 | 4.462 | | |
| Year 10| | 6.55 | 5.90 | 4.461 | | |
| Year 11| | 3.28 | 5.91 | 4.462 | | |
| Year 12| | |
Transcribed Image Text:### MACRS Mid-Quarter Convention: Depreciation Rates
#### Table 2a: For property placed in service during the first quarter
- **5-Year Recovery Period**
- Year 1: 35.00%
- Year 2: 26.00%
- Year 3: 15.60%
- Year 4: 11.01%
- Year 5: 11.01%
- Year 6: 1.38%
- **7-Year Recovery Period**
- Year 1: 25.00%
- Year 2: 21.43%
- Year 3: 15.31%
- Year 4: 10.93%
- Year 5: 8.75%
- Year 6: 8.74%
- Year 7: 8.75%
- Year 8: 1.09%
#### Table 2b: For property placed in service during the second quarter
- **5-Year Recovery Period**
- Year 1: 25.00%
- Year 2: 30.00%
- Year 3: 18.00%
- Year 4: 11.37%
- Year 5: 11.37%
- Year 6: 4.26%
- **7-Year Recovery Period**
- Year 1: 17.85%
- Year 2: 23.47%
- Year 3: 16.76%
- Year 4: 11.97%
- Year 5: 8.87%
- Year 6: 8.87%
- Year 7: 8.87%
- Year 8: 3.34%
#### Table 2c: For property placed in service during the third quarter
- **5-Year Recovery Period**
- Year 1: 15.00%
- Year 2: 34.00%
- Year 3: 20.40%
- Year 4: 12.24%
- Year 5: 11.30%
- **7-Year Recovery Period**
- Year 1: 10.71%
- Year 2: 25.51%
- Year 3: 18.22%
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