Question
Beth's business purchased only one asset during the current year (a full 12-month tax year). On December 1 Beth placed in service machinery (seven-year property)
Beth's business purchased only one asset during the current year (a full 12-month tax year). On December 1 Beth placed in service machinery (seven-year property) with a basis of $59,000. Calculate the maximum depreciation expense (ignoring 179 and bonus depreciation).'
TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter
| Depreciation Rate for Recovery Period | ||
|---|---|---|
| 5-Year | 7-Year | |
| Year 1 | 35.00% | 25.00% |
| Year 2 | 26.00 | 21.43 |
| Year 3 | 15.60 | 15.31 |
| Year 4 | 11.01 | 10.93 |
| Year 5 | 11.01 | 8.75 |
| Year 6 | 1.38 | 8.74 |
| Year 7 | 8.75 | |
| Year 8 | 1.09 | |
TABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter
| Depreciation Rate for Recovery Period | ||
|---|---|---|
| 5-Year | 7-Year | |
| Year 1 | 25.00% | 17.85% |
| Year 2 | 30.00 | 23.47 |
| Year 3 | 18.00 | 16.76 |
| Year 4 | 11.37 | 11.97 |
| Year 5 | 11.37 | 8.87 |
| Year 6 | 4.26 | 8.87 |
| Year 7 | 8.87 | |
| Year 8 | 3.34 | |
TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter
| Depreciation Rate for Recovery Period | ||
|---|---|---|
| 5-Year | 7-Year | |
| Year 1 | 15.00% | 10.71% |
| Year 2 | 34.00 | 25.51 |
| Year 3 | 20.40 | 18.22 |
| Year 4 | 12.24 | 13.02 |
| Year 5 | 11.30 | 9.30 |
| Year 6 | 7.06 | 8.85 |
| Year 7 | 8.86 | |
| Year 8 | 5.53 | |
TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter
| Depreciation Rate for Recovery Period | ||
|---|---|---|
| 5-Year | 7-Year | |
| Year 1 | 5.00% | 3.57% |
| Year 2 | 38.00 | 27.55 |
| Year 3 | 22.80 | 19.68 |
| Year 4 | 13.68 | 14.06 |
| Year 5 | 10.94 | 10.04 |
| Year 6 | 9.58 | 8.73 |
| Year 7 | 8.73 | |
| Year 8 | 7.64 | |
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The Church Growth Handbook Includes Complete Ministry Audit
Authors: William M. Easum
1st Edition
0687081610, 978-0687081615
