Diana acquires, for $94,400, and places in service a 5-year class asset on Decem
ID: 2427053 • Letter: D
Question
Diana acquires, for $94,400, 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.
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
Answer:
Dec 19,2015 is the 4th quarter therefore we would use this table Table 8.5 : Mid-Quarter Convention.
She also elects directional first year deprecation so she gets to take 50% of the depreciation in 2015 plus the normal amount of depreciation from the table. The amount is .05% since the asset is in the 5-year class , and was placed in the 5th quarter and it is year 1 of the assets useful life.
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