Diana acquires, for $152,000, and places in service a 5-year class asset on Dece

Question

Diana acquires, for $152,000, and places in service a 5-year class asset on December 19, 2015. Diana does not elect immediate expensing under § 179. She elects additional first-year deprecation.

Note: Assume that the 2014 additional first-year depreciation is extended to 2015. Below is the depreciation table to use for this problem.

Diana’s total cost recovery deduction for the asset is ? for 2015.

EXHIBIT 8.5 MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention For Property Placed in Service after December 31, 1986 (Partial Table) 3-Year Second Quarter 41.67 38.89 5-Year Second Quarter First Recovery Year Quarter 58.33 27.78 Third Quarter 25.00 50.00 Fourth Quarter 8.33 61.11 Recovery Year Fourth Quarter 5.00 38.00 First Third Quarter 35.00 26.00 Quarter 15.00 34.00 25.00 30.00 7-Year Second Quarter 17.85 23.47 The figures in this table are taken from the official tables that appear in Rev.Proc. 87-57, 1987-2 C.B. 687. Because of Recovery Year Third Quarter 10.71 25.51 Fourth Quarter 3.57 27.55 First Quarter 25.00 21.43 2 their length, the complete tables are not presented.

Explanation / Answer

50% Additional First year depreciation (152000*.50) =76000

MACRS cost recovery ( 152000-76000)*.20=               15200

Total cost recovery                                                           91200

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