Falcon, Inc. has the following assets in service at the end of 2021: Asset Cost Recovery Period Date placed in service Commercial RE Commercial RE 7 Building Land Furniture and Fixtures Manufacturing Equipment Manufacturing Equipment Transportation Equipment Office Equipment 1,000,000 200,000 15,000 80,000 219,000 795,000 70,000 7 March 2018 March 2018 June 2018 April 2019 January 2021 August 2021 December 2021 7 5 7 . In 2021 Falcon has taxable income of $10,000,000. Falcon did not utilize a $179 deduction or bonus depreciation prior to 2021. They would like to take the $179 deduction, but not bonus depreciation, this year. Calculate the most beneficial cost recovery for Falcon for 2021. TABLE 1-MACRS HALF YEAR CONVENTION Depreciation Rate for Recovery Period Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 1 2 3 33.33% 44.45 14.81 7.41 14.29% 24.49 17.49 20.00% 32.00 19.20 11.52 11.52 5.76 10.00% 18.00 14.40 11.52 9.22 5.00% 9.50 8.55 7.70 4 5 12.49 8.93 8.92 8.93 4.46 6.93 6.23 6 7 7.37 6.55 8 6.55 9 6.56 10 6.55 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 3.28 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 11 12 13 14 15 16 17 18 19 20 21 4.461 2.231 TABLE 2A - MACRS MID QUARTER CONVENTION - FIRST QUARTER Depreciation Rate for Recovery Period Year 5-Year 7-Year 1 2 3 4. 35.00% 26.00 15.60 11.01 11.01 1.38 25.00% 21.43 15.31 10.93 8.75 8.74 5 6 7 8.75 1.09 8 TABLE 2B - MACRS MID QUARTER CONVENTION - SECOND QUARTER Depreciation Rate for Recovery Period Year 5-Year 7-Year 25.00% 1 2 30.00 3 17.85% 23.47 16.76 11.97 8.87 8.87 18.00 11.37 11.37 4.26 4 5 6 7 8.87 3.34 8 TABLE 2C - MACRS MID QUARTER CONVENTION - THIRD QUARTER Depreciation Rate for Recovery Period Year 5-Year 7-Year 1 2 15.00% 34.00 20.40 12.24 10.71% 25.51 18.22 3 4 13.02 5 11.30 9.30 8.85 6 7.06 7 8.86 8 5.53 TABLE 2D - MACRS MID QUARTER CONVENTION - FOURTH QUARTER Depreciation Rate for Recovery Period Year 5-Year 7-Year 1 2 5.00% 38.00 22.80 13.68 10.94 9.58 3.57% 27.55 19.68 14.06 3 4 5 10.04 8.73 6 7 8.73 7.64 8 TABLE 5 - NONRESIDENTIAL REAL PROPERTY MID-MONTH CONVENTION - 39 YEARS (for assets placed in service after May 13, 1993) Month Property Placed in Service Year 1 2 3 4 5 6 7 8 9 10 11 12 1 2-39 40 2.461% 2.564 0.107 2.247% 2.564 0.321 2.033% 2.564 0.535 1.819% 2.564 1.605% 2.564 0.963 1.391% 2.564 1.177 IT 1.177% 2.564 1.391 0.963% 2.564 1.605 0.749% 2.564 1.819 0.535% 2.564 2.033 0.321% 2.564 2.247 0.107% 2.564 2.461 0.749
