Firm J purchased a depreciable business asset for $70,500. Assuming the firm uses the half-year convention, compute its first-year MACRS depreciation if the asset is: Use Table 7-1 and Table 7-2.

Required:

1. A land irrigation system.
2. Duplicating equipment.
3. An oceangoing barge.
4. Small manufacturing tools.

TABLE 7.1 Recovery Periods for Tangible Business Assets

MACRS Recovery Period	Assets Included
3 years	Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food manufacturing.
5 years	Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle, cargo containers, new farming machinery and equipment.
7 years	Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment.
10 years	Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels, barges, and other water transportation equipment; fruit- or nut-bearing trees and vines.
15 years	Certain building improvements; land improvements such as fencing, roads, sidewalks, bridges, irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and service station buildings.
20 years	Certain farm buildings, municipal sewers.
25 years	Commercial water utility property.
27.5 years	Residential rental real property (duplexes and apartments).
39 years	Nonresidential real property (office buildings, factories, and warehouses).
50 years	Railroad grading or tunnel bore.

TABLE 7.2 MACRS for Business Personalty (Half-Year Convention)

Recovery Period
Year	3-Year	5-Year	7-Year	10-Year	15-Year	20-Year
	Depreciation Rate
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