Find the year 3 depreciation using MACRS for a fleet of taxis (5-year property) that is purchased and placed in service at midyear. The price of the fleet is $247,653 and a $120,000 section 179 deduction was elected when the fleet was placed in service.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Find the year 3
|
Depreciation rate for recovery period
|
|||||||||||||
|
Year
|
3-Year
|
5-Year
|
7-Year
|
10-Year
|
15-Year
|
20-Year
|
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
1
|
|
33.33
|
%
|
20.00
|
%
|
14.29
|
%
|
10.00
|
%
|
5.00
|
%
|
3.750
|
%
|
|
2
|
|
44.45
|
|
32.00
|
|
24.49
|
|
18.00
|
|
9.50
|
|
7.219
|
|
|
3
|
|
14.81
|
|
19.20
|
|
17.49
|
|
14.40
|
|
8.55
|
|
6.677
|
|
|
4
|
|
7.41
|
|
11.52
|
|
12.49
|
|
11.52
|
|
7.70
|
|
6.177
|
|
|
5
|
|
|
|
11.52
|
|
8.93
|
|
9.22
|
|
6.93
|
|
5.713
|
|
|
6
|
|
|
|
5.76
|
|
8.92
|
|
7.37
|
|
6.23
|
|
5.285
|
|
|
7
|
|
|
|
|
|
8.93
|
|
6.55
|
|
5.90
|
|
4.888
|
|
|
8
|
|
|
|
|
|
4.46
|
|
6.55
|
|
5.90
|
|
4.522
|
|
|
9
|
|
|
|
|
|
|
|
6.56
|
|
5.91
|
|
4.462
|
|
|
10
|
|
|
|
|
|
|
|
6.55
|
|
5.90
|
|
4.461
|
|
|
11
|
|
|
|
|
|
|
|
3.28
|
|
5.91
|
|
4.462
|
|
|
12
|
|
|
|
|
|
|
|
|
|
5.90
|
|
4.461
|
|
|
13
|
|
|
|
|
|
|
|
|
|
5.91
|
|
4.462
|
|
|
14
|
|
|
|
|
|
|
|
|
|
5.90
|
|
4.461
|
|
|
15
|
|
|
|
|
|
|
|
|
|
5.91
|
|
4.462
|
|
|
16
|
|
|
|
|
|
|
|
|
|
2.95
|
|
4.461
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
4.462
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
4.461
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
4.462
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
4.461
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
2.231
|
The depreciation is=
(Round to the nearest cent as needed.)
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