ABC Corporation bought new MACRS 5-year property in the US in Jan, 2010 for $350,000 and it was put in service in May 1 of the same year. ABC needs to take however much depreciation in year 2010 as could be possible. Figure the year 2010 depreciation for ABC. Also, evaluate depreciation amount, If ABC had been situated in a qualified undertaking zone. Clarify the depreciation technique you utilized.

Incorporate the tax benefits (investment/reserve) for the year 2010 and the present value of the aggregate tax benefit for the whole 5-year time frame. Talk about how the tax breaks or benefits and present value would change if an alternate technique for depreciation was utilized. Additionally, talk about when ABC would not take however much depreciation as could reasonably be probable.

Provide a response in 500 words.

Chegg experts, want more information as they are considering the question is not clear.

Subscriber response: The question is very clear and too the point. The following points are the questions for your clarity.

Points noted:

Jan 2010 purchase of $350,000 new equipment based on MACRS 5 Year

Equipment serviced in May 2010

Calculate 2010 depreciation. As much as possible

Depreciation for qualified enterprise zone? Explain Depreciation method used?

Tax benefits for first year & present value (PV) of tax benefits for 5 yr period?

If alternate Depreciation Method is used, how will it influence tax benefit and PV?