1. Crouch LLC placed in service on May 19, 2021, machinery and equipment (seven-year property) with a basis of $3,200,000. Assume that Crouch has sufficient income to avoid any limitations. Calculate the maximum depreciation deduction including 179 expensing (but ignoring bonus depreciation). (Use MACRS Table 1.)

Table 1 MACRS Half-Year Convention

Depreciation Rate for Recovery Period
	3-Year	5-Year	7-Year	10-Year	15-Year	20-Year
Year 1	33.33%	20.00%	14.29%	10.00%	5.00%	3.750%
Year 2	44.45	32.00	24.49	18.00	9.50	7.219
Year 3	14.81	19.20	17.49	14.40	8.55	6.677
Year 4	7.41	11.52	12.49	11.52	7.70	6.177
Year 5		11.52	8.93	9.22	6.93	5.713
Year 6		5.76	8.92	7.37	6.23	5.285
Year 7			8.93	6.55	5.90	4.888
Year 8			4.46	6.55	5.90	4.522
Year 9				6.56	5.91	4.462
Year 10				6.55	5.90	4.461
Year 11				3.28	5.91	4.462
Year 12					5.90	4.461
Year 13					5.91	4.462
Year 14					5.90	4.461
Year 15					5.91	4.462
Year 16					2.95	4.461
Year 17						4.462
Year 18						4.461
Year 19						4.462
Year 20						4.461
Year 21						2.231

2. Potomac LLC purchased an automobile for $31,700 on August 5, 2021. What is Potomac's depreciation deduction for 2021? (Ignore any possible bonus depreciation.) (Use MACRS Table 1 and Exhibit 10-10.)

EXHIBIT 10-10 Automobile Depreciation Limits

Recovery Year Year Placed in Service 2021* 2020 2019 2018 1 10,100** 10,100** 10,100** 10,000** 2 16,100 16,100 16,100 16,000 3 9,700 9,700 9,700 9,600 4 and after 5,760 5,760 5,760 5,760

*As of press date, the IRS had not released the 2021 limitations for automobiles, so throughout the chapter we use the same limitations as in 2020 for 2021.

**$8,000 additional depreciation is allowed when bonus depreciation is claimed [168(k)(2)(F)].