TABLE 7.2 MACRS for Business Personalty (Half-Year Convention) Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year Depreciation Rate 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 TABLE 7.1 Recovery Periods for Tangible Business Assets MACRS Recovery Period 3 years 5 years 7 years 10 years 15 years 20 years 25 years 27.5 years 39 years 50 years Assets Included Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food manufacturing. Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle, cargo containers, new farming machinery and equipment. Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment. Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels, barges, and other water transportation equipment; fruit- or nut-bearing trees and vines. Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges, irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and service station buildings. Certain farm buildings, municipal sewers. Commercial water utility property. Residential rental real property (duplexes and apartments). Nonresidential real property (office buildings, factories, and warehouses). Railroad grading or tunnel bore.
TABLE 7.2 MACRS for Business Personalty (Half-Year Convention) Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year Depreciation Rate 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 TABLE 7.1 Recovery Periods for Tangible Business Assets MACRS Recovery Period 3 years 5 years 7 years 10 years 15 years 20 years 25 years 27.5 years 39 years 50 years Assets Included Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food manufacturing. Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle, cargo containers, new farming machinery and equipment. Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment. Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels, barges, and other water transportation equipment; fruit- or nut-bearing trees and vines. Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges, irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and service station buildings. Certain farm buildings, municipal sewers. Commercial water utility property. Residential rental real property (duplexes and apartments). Nonresidential real property (office buildings, factories, and warehouses). Railroad grading or tunnel bore.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 13SPA: INTANGIBLE LONG-TERM ASSETS Track Town Co. had the following transactions involving intangible...
Related questions
Question
On May 12, 2023, Nelson Incorporated purchased eight passenger automobiles for its business. Nelson did not make a Section 179 election to expense any portion of the cost of the automobiles, which are five-year recovery property subject to the half-year convention. Assume there is no bonus depreciation or Section 179 deduction. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2023 to 2026:
| 2023 | $ 12,200 |
|---|---|
| 2024 | 19,500 |
| 2025 | 11,700 |
| 2026 and subsequent years | 6,960 |
Required:
- Compute Nelson’s depreciation deduction with respect to the automobiles for 2023 and 2024 assuming the automobiles were Mini Coopers costing $14,300 each.
- Compute Nelson’s depreciation deduction with respect to the automobiles for 2023 and 2024 assuming the automobiles were Cadillacs costing $80,000 each.
Transcribed Image Text:TABLE 7.2 MACRS for Business Personalty (Half-Year Convention)
Recovery Period
3-Year
5-Year
7-Year
10-Year
15-Year
20-Year
Year
Depreciation Rate
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
Transcribed Image Text:TABLE 7.1 Recovery Periods for Tangible Business Assets
MACRS
Recovery
Period
3 years
5 years
7 years
10 years
15 years
20 years
25 years
27.5 years
39 years
50 years
Assets Included
Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food
manufacturing.
Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle,
cargo containers, new farming machinery and equipment.
Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment.
Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels, barges, and
other water transportation equipment; fruit- or nut-bearing trees and vines.
Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges, irrigation
systems, and landscaping; telephone distribution plants; pipelines; billboards; and service station buildings.
Certain farm buildings, municipal sewers.
Commercial water utility property.
Residential rental real property (duplexes and apartments).
Nonresidential real property (office buildings, factories, and warehouses).
Railroad grading or tunnel bore.
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