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 4 and Table 5.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

Placed in Original Asset Service Date Basis Machinery December 15 $ 92,000 Computer equipment March 13 16,200 Used delivery truck* February 26 41,000 Furniture April 13 164,000 Total $ 313,200

Explanation / Answer

1 2 1*2 Asset Placed in Service Date Quarter Original Basis Rate Depreciation Machinery ( 7 year) 42339 2nd 92000 0.1785 16422 Computer Equipment ( 5 year) 41334 3rd 16200 0.15 2430 Used Delivery Truck*(5 year) 46054 3rd 41000 0.15 6150 Furniture( 7 year) 41365 4th 164000 0.0357 5854.8    Total 313200 30856.8 $30856.8, under the mid-quarter convention, as computed below.Convers is required to use themid-quarter convention because greater than 40 percent of tangible personal property wasplaced in service during its 4thquarter.Convers placed 52.4% [$164,000 / ($92,000 + $16,000+ $41,000 + $164,000)] of its tangible personal property in service during the 4th quarter (April– June)

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