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7-DEPRECIATION UNDER FEDERAL INCOME TAX DEPRECIATION RULES Table 1: Half-Year Convention 200% Declining Balance Year 3 Year 5 Year7 Year 33.33% 44.45% 14.81% 7.41% 20.00%

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7-DEPRECIATION UNDER FEDERAL INCOME TAX DEPRECIATION RULES Table 1: Half-Year Convention 200% Declining Balance Year 3 Year 5 Year7 Year 33.33% 44.45% 14.81% 7.41% 20.00% 32.00% 19.20% 11.52% 11.52% 14.29% 24.49% 17.49% 12.49% 8.9396 8.92% 8.93% 4.46% 5.76% 10 12 13 14 15 1. Below are four asset purchases made in 2012: Cost Date Asset Office Table Office Deslk File Cabinet Computer January 1, 2012 September 29, 2012 October 15, 2012 December 31, 2012 $1,000 1,500 2,000 6,000 What is the maximum 2012 Section 179 deduction for these purchases? a. $10,500 $2,500 c $8,000 d. $0 2On May 11, 2012, your calendar year firm pays $6,000 for a used computer server, its only asset purchase for the year, and estimates that the server will have a salvage value of $500. If no Section 179 deduction is taken, what is your firm's maximum 2012 deduction for depreciation? a. $2,000 b. $1,200 c. $1,100 d. $869 13

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