Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 8.2, 8.4, 8.5) On September 14, 2019, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $40,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179. Click here to access the depreciation table and click here to access the annual automobile depreciation limitations. TABLE 8.2 Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986) Recovery Year 3-Year (200% DB) 5-Year (200% DB) 7-Year (200% DB) 10-Year (200% DB) 15-Year (150% DB) 20-Year (150% DB) 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 ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS Year of Use 2019 Limits 2018 Limits Year 1 $18,100* $18,000* Year 2 16,100 16,000 Year 3 9,700 9,600 Year 4 (and subsequent years until fully depreciated) 5,760 5,760 *Additional bonus depreciation of $8,000 is included in this amount. Calculate Jay's depreciation deduction for 2019 assuming bonus depreciation.

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Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles
(LO 8.2, 8.4, 8.5)

On September 14, 2019, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $40,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179.

Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.

TABLE 8.2

Accelerated Depreciation for Personal Property Assuming Half-Year Convention
(For Property Placed in Service after December 31, 1986)

Recovery Year	3-Year (200% DB)		5-Year (200% DB)	7-Year (200% DB)		10-Year (200% DB)		15-Year (150% DB)	20-Year (150% DB)

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

ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS
Year of Use	2019 Limits	2018 Limits
Year 1	$18,100*	$18,000*
Year 2	16,100	16,000
Year 3	9,700	9,600
Year 4 (and subsequent years until fully depreciated)	5,760	5,760

*Additional bonus depreciation of $8,000 is included in this amount.

Calculate Jay's depreciation deduction for 2019 assuming bonus

depreciation.

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