Dana forms a small manufacturing company. Her company places the following ng pr

Question

Dana forms a small manufacturing company. Her company places the following ng properties into service during the year, on the dates indicated: Type of property Date placed in service Cost_____ Business building April 6 $275,000 Furniture June 5 $57,000 Machinery September 2 $65,000 Computer December 27 $25,000 She chooses not to do any Section 179 expense, and also elects not to take bonus depreciation. She uses MACRS depreciation. Calculate the first year depreciation on the building, and also on the machinery

Explanation / Answer

Now, according to the MACRS the life of an business building is 39 years and life of equipment is 10 years.

Depreciation for business equipment = 2.461% of 275000*(9/12) = 5075.81

Depreciation for equipment = 10% of 65000 * (4/12)

= 2166.67

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