Problem 8-7Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)Calculate the following:Click here to access the various depreciation tables. If required, round your final answers to the nearest dollar. If your answer is zero,enter "0".a. The first year of depreciation on a office building that cost $250,000 purchased June 2, 2021.b. The second year (2022) of depreciation on a computer that cost $5,000 purchased in May 2021, using the half-year convention and accelerateddepreciation considering any bonus depreciation taken.c. The first year of depreciation on a computer costing $2,800 purchased in May 2021, using the half-year convention and straight-line depreciationwith no bonus depreciation.d. The third year of depreciation on business furniture costing $10,000 purchased in March 2019, using the half-year convention and accelerateddepreciation but no bonus depreciation.

Answered: Modified Accelerated Cost Recovery…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 7P: Calculate the following: The first year of depreciation on a residential rental building costing...

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Problem 8-7
Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)
Calculate the following:
Click here to access the various depreciation tables. If required, round your final answers to the nearest dollar. If your answer is zero,
enter "0".
a. The first year of depreciation on a office building that cost $250,000 purchased June 2, 2021.
b. The second year (2022) of depreciation on a computer that cost $5,000 purchased in May 2021, using the half-year convention and accelerated
depreciation considering any bonus depreciation taken.
c. The first year of depreciation on a computer costing $2,800 purchased in May 2021, using the half-year convention and straight-line depreciation
with no bonus depreciation.
d. The third year of depreciation on business furniture costing $10,000 purchased in March 2019, using the half-year convention and accelerated
depreciation but no bonus depreciation.

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MACRS (Modified Accelerated Cost Recovery System) is a method of depreciation that is used in the US for the purpose of taxation. This method also reduces the value of an asset over its life as done by any other method of depreciation, the difference is that the rate of depreciation is predefined as per the class of the property and the recovery period.

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