Exhibit:
Way Corporation disposed of the following tangible personal property assets in the current year. Date Acquired 5/12/17 3/23/18 9/17/19 10/11/20 10/11/21 Asset Furniture (7-year) Machinery (7-year) Delivery truck* (5-year) Machinery (7-year) Computer (5-year) *Used 100 percent for business. Date Sold 7/15/21 3/15/21 3/13/21 8/30/21 12/15/21 Depreciation deduction Convention HY MQ HY MQ HY Original Basis $ 105,000 122,000 60,000 322,000 120,000 Assume that the delivery truck is not a luxury auto. Calculate Way Corporation's 2021 depreciation deduction (ignore 179 expense and bonus depreciation for this problem). (Use MACRS Table 1, Table 2, and Exhibit 10-6.) (Round your Intermediate dollar calculations and final answer to the nearest whole dollar amount.) Table 1 MACRS Half-Year Convention Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20.00% 14.29% 10.00% 5.00% 32.00 18.00 9.50 19.20 14.40 8.55 11.52 7.70 9.22 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 33.33% 44.45 14.81 7.41 11.52 11.52 5.76 24.49 17.49 12.49 8.93 8.92 8.93 4.46 7.37 6.55 6.55 6.56 6.55 3.28 20-Year 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year 35.00% 25.00% 26.00 21.43 15.60 15.31 11.01 10.93 11.01 8.75 1.38 8.74 8.75 1.09 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year 25.00% 17.85% 30.00 23.47 18.00 11.37 11.37 4.26 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 16.76 11.97 8.87 8.87 8.87 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 15.00% 10.71% 34.00 25.51 20.40 18.22 12.24 13.02 11.30 7.06 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 9.30 8.85 8.86 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 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 5.00% 38.00 22.80 13.68 10.94 9.58 3.57% 27.55 19.68 14.06 10.04 8.73 8.73 7.64 EXHIBIT 10-6 Mid-Quarter Convention Percentage of Full-Year's Depreciation in Year of Disposition Quarter of Disposition 1st Calculation* Percentage 12.5% 1.5/12 37.5 4.5/12 62.5 7.5/12 87.5 10.5/12 *The calculation is the number of months the taxpayer held or is deemed to have held the asset in the year of disposition divided by 12 months in the year. 2nd 3rd 4th
