Euclid acquires a 7-year class asset on May 9, 2020, for $80,000 (the only asset acquired during the year). Euclid does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. Calculate Euclid's cost recovery deduction for 2020 and 2021. 2020: $ 2021: $
Exercise 8-19 (LO. 2)
Euclid acquires a 7-year class asset on May 9, 2020, for $80,000 (the only asset acquired during the year). Euclid does not elect immediate expensing under § 179. He does not claim any available additional first-year
Click here to access the depreciation table to use for this problem.
If required, round your answers to the nearest dollar.
Calculate Euclid's cost recovery deduction for 2020 and 2021.
2020: $
2021: $
8-7cCost Recovery Tables
| Summary of Tables | |
|---|---|
| Exhibit 8.3 |
Regular MACRS table for personalty.
|
| Exhibit 8.4 |
Regular MACRS table for personalty.
|
| Exhibit 8.5 |
MACRS optional straight-line table for personalty.
|
| Exhibit 8.6 |
Alternative minimum tax declining-balance table for personalty.
|
| Exhibit 8.7 |
Alternative depreciation system straight-line table for personalty.
|
| Exhibit 8.8 |
Regular MACRS straight-line table for realty.
|
| Exhibit 8.9 |
Alternative depreciation system straight-line table for realty.
|
*Switchover to straight-line depreciation.
MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates)
| For Property Placed in Service after December 31, 1986 (Partial Table) | ||||
|---|---|---|---|---|
| 3-Year | ||||
| Recovery Year | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |
| 1 | 58.33 | 41.67 | 25.00 | 8.33 |
| 2 | 27.78 | 38.89 | 50.00 | 61.11 |
| 5-Year | ||||
| Recovery Year | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |
| 1 | 35.00 | 25.00 | 15.00 | 5.00 |
| 2 | 26.00 | 30.00 | 34.00 | 38.00 |
| 7-Year | ||||
| Recovery Year | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |
| 1 | 25.00 | 17.85 | 10.71 | 3.57 |
| 2 | 21.43 | 23.47 | 25.51 | 27.55 |
MACRS Straight-Line Depreciation for Personal Property Assuming Half-Year Convention
| For Property Placed in Service after December 31, 1986 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Other Recovery Years | Last Recovery Year | |||||||||
| MACRS Class | % First Recovery Year | Years | % | Year | % | |||||
| 3-year | 16.67 | 2–3 | 33.33 | 4 | 16.67 | |||||
| 5-year | 10.00 | 2–5 | 20.00 | 6 | 10.00 | |||||
| 7-year | 7.14 | 2–7 | 14.29 | 8 | 7.14 | |||||
| 10-year | 5.00 | 2–10 | 10.00 | 11 | 5.00 | |||||
| 15-year | 3.33 | 2–15 | 6.67 | 16 | 3.33 | |||||
| 20-year | 2.50 | 2–20 | 5.00 | 21 | 2.50 |
Note: The last two rows of this table are used for qualified improvement property (15-year normal MACRS; 20-year ADS).
* The figures in this table are taken from the official table that appears in Rev.Proc. 87–57, 1987–2 C.B. 687. Because of its length, the complete table is not presented.
**Switchover to straight-line depreciation.
ADS Straight-Line for Personal Property Assuming Half-Year Convention (Percentage Rates)
| For Property Placed in Service after December 31, 1986 (Partial Table) | ||||
|---|---|---|---|---|
| Recovery Year | 5-Year Class | 10-Year Class | 12-Year Class | |
| 1 | 10.00 | 5.00 | 4.17 | |
| 2 | 20.00 | 10.00 | 8.33 | |
| 3 | 20.00 | 10.00 | 8.33 | |
| 4 | 20.00 | 10.00 | 8.33 | |
| 5 | 20.00 | 10.00 | 8.33 | |
| 6 | 10.00 | 10.00 | 8.33 | |
| 7 | 10.00 | 8.34 | ||
| 8 | 10.00 | 8.33 | ||
| 9 | 10.00 | 8.34 | ||
| 10 | 10.00 | 8.33 | ||
| 11 | 5.00 | 8.34 | ||
| 12 | 8.33 | |||
| 13 | 4.17 |
*The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of .001 for the last digit when compared with the official tables.
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What would be the answer with the amount changed from $80,000 to $138,900?
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