Convers Corporation (June 30 year-end) acquired the following assets during the

Question

Convers Corporation (June 30 year-end) acquired the following assets during the current tax year (ignore §179 expense and bonus depreciation for this problem):

*The delivery truck is not a luxury automobile.

What is the allowable MACRS depreciation on Convers’s property in the current year? (Use MACRS Table 1, Table 2, Table 3, Table 4and Table 5.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

Placed in Original Asset Service Date Basis Machinery October 17 $ 118,000 Computer equipment March 26 16,000 Used delivery truck* January 27 24,250 Furniture June 17 194,000 Total $ 352,250

Explanation / Answer

A B A x B Asset Placed in Service Date Original Basis Quarter MACRS Year MACRS Rate Depreciation Machinery October 17 $118,000.00 2 7 17.85% $21,063.00 Computer equipment March 26 $16,000.00 3 5 15.00% $2,400.00 Used delivery truck* January 27 $24,250.00 3 5 15.00% $3,637.50 Furniture June 17 $194,000.00 4 7 3.57% $6,925.80 Total $352,250.00 $34,026 Mid-quarter convention is used because greater than 40 percent of tangible personal property was placed in service during its 4th quarter. Convers placed 55.07% ($194,000 /$352,250) of its tangible personal property in service during the 4th quarter (April – June)

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