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

New passenger automobile (September 30)	$60,600
Baking equipment (June 30)	18,180

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.

TABLE 8.2

Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986)

Recovery Year			3-Year (200% DB)			5-Year (200% DB)			7-Year (200% DB)			10-Year (200% DB)			15-Year (150% DB)			20-Year (150% DB)
1			33.33			20.00			14.29			10.00			5.00			3.750
2			44.45			32.00			24.49			18.00			9.50			7.219
3			14.81	*		19.20			17.49			14.40			8.55			6.677
4			7.41			11.52	*		12.49			11.52			7.70			6.177
5						11.52			8.93	*		9.22			6.93			5.713
6						5.76			8.92			7.37			6.23			5.285
7									8.93			6.55	*		5.90	*		4.888
8									4.46			6.55			5.90			4.522
9												6.56			5.91			4.462	*
10												6.55			5.90			4.461
11												3.28			5.91			4.462
12															5.90			4.461
13															5.91			4.462
14															5.90			4.461
15															5.91			4.462
16															2.95			4.461
17																		4.462
18																		4.461
19																		4.462
20																		4.461
21																		2.231

*Switch to straight-line depreciation.

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 years until fully depreciated)	5,760
*Additional bonus depreciation of $8,000 is included in this amount.