Mike purchases a heavy-duty truck (5-year class recovery property) for his deliv

Question

Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2012. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Assume no election to expense is made and no bonus depreciation is taken.

a.      Calculate the amount of depreciation for 2012 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.

b.      Calculate the amount of depreciation for 2012 using the straight-line depreciation election, using MACRS tables over the minimum number of years.

c.       Calculate the amount of accelerated depreciation for 2012 that Mike could deduct using the MACRS tables.

I need help with B and C

Explanation / Answer

Hi,

Please find the answer as follows:

Part B:

Part C:

Thanks.

Value % Depreciation 2012 39080 10% 3908
2013 39080 20% 7816 2014 39080 20% 7816 2015 39080 20% 7816 2016 39080 20% 7816 2017 39080 20% 7816

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