39.

During 2020, William purchases the following capital assets for use in his catering business:

New passenger automobile (September 30)	$64,600
Baking equipment (June 30)	19,380

Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Assume he has adequate taxable income.

ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS Year of Use 2019 and 2020 Limits Year 1 $18,100* Year 2 16,100 Year 3 9,700 Year 4 (and subsequent 5,760 years until fully depreciated) *Additional bonus depreciation of $8,000 is included in this amount.TABLE 8.2 Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986) Recovery 3-Year 5-Year 7-Year 10-Year Year (200% DB) 15-Year (200% DB) 20-Year (200% DB) (200% DB) (150% DB) (150% DB) 33.33 20.00 14.29 10.00 5.00 3.750 44.45 32.00 24.49 18.00 9.50 7.219 14.81 * 19.20 17.49 14.40 8.55 6.677 7.41 11.52 * 12.49 11.52 7.70 6.177 11.52 8.93 * 9.22 6.93 5.713 5.76 8.92 7.37 6.23 5.285 8.93 6.55 * 5.90 * 4.888 4.46 6.55 5.90 4.522 6.56 5.91 4.462 * 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 5.91 4.462 5.90 4.461 5.91 4.462 16 2.95 4.461 17 4.462 18 4.461 19 4.462 20 4.461 21 2.231