You just purchased some equipment that is classified as 5-year property for MACR

Question

You just purchased some equipment that is classified as 5-year property for MACRS. The equipment cost $67,600. What will the book value of this equipment be at the end of three years should you decide to resell the equipment at that point in time?
                                    MACRS 5-year property
                                      Year                 Rate
                                       1                   20.00%
                                       2                   32.00%
                                       3                   19.20%
                                       4                   11.52%
                                       5                   11.52%
                                       6                   5.76%

Explanation / Answer

The cost of equipment =$ 67,600

as per MACRS 5 year property depriciation

1 st rate dep=20% 67600-13520=54080-17305.60(2 nd year 32%)=36,774.40-7060.68(3 rd year 19.20%)=29,713.72

so the value of the equipment at the end of 3 rd year =$ 29,713.72

at this stage because the full value of the equipment not recoverd and the depriciation is tax deductable not willing to resell

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