TABLE 2a MACRS Mid-Quarter Convention: For property placed in serviceduring the first quarterTABLE 26 MACRS Mid-Quarter Convention: For property placed in service during thesecond quarterDepreciation Rate for Recovery Period5-Year7-YearYear 125.00%17.85%Year 230.002347Year 318.0016.76Year 411.3711.97Year 511378.87Year 64.268.87Year 78.87Year 83.34TABLE 2e MACRS Mid-Quarter Convention: For property placed in service during the thirdquarterDepreciation Rate for Recovery Period5-Year7-YearYear 115.00%10.71%Year 234.0025.51Year 320.4018.22Year 412.2413.02Year 511.309.30Year 67.068.85Year 78.86Year 8553TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during thefourth quarterDepreciation Rate for Recovery Period5-Year7-YearYear 15.00%3.57%Year 238.0027.55Year 322.8019.68Year 413.6814.06Year 510.9410.04Year 69.588.73 Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased duringthe year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn't want to take bonus depreciation for2021 or 2022) in the following alternative scenarios (assuming half-year convention for allI): (Use MACRS Table 1, Table 2,and Exhibit 10-10.)f. The vehicle cost $92,000, and it is an SUV that weighs 6,500 pounds. Business use was 100 percent.DepreciationdeductionYear20212022

MACRS is Modified Accelarated Cost Recovery System. The total depreciation is same as straightline method but it allows early years higher rate of depreciation and later years lower rate of depreciation for the benefit of taxpayers. MACRS half year convetion Table 1 and exibit 10-10 allows first year depreciation @ 10% and for second year 18%Statement showing depreciation for year 1 & 2 as per MACRS half yearly convention Table 1 10-10 exibit Particulars Cost Dep. Rate Depreciation Year 1 92,000 10% 9,200 Year 2 92,000 18% 16,560