I am struggling with the attached document Essentials of Federal Income Taxation (2016ed) Ch8-18.

MACRS and Averaging Conventions: Howard Fields (SSN 748-29-4631) operates the U.B. Fields Company as a sole proprietorship. H.B. Fields has the following depreciable property. The auto is used 100% for business. Howard has written evidence of the business use, which was 19,280 miles in 2015. He has another vehicle he uses for personal use. Using this information, prepare Howard?s 2015 Form 4562, Depreciation and Amortization.

Date of Acquisition	Item	Cost	Averaging Convention
Jan 30, 2014	Used Car	24,000	HY
Mar 10, 2015	Garage for Auto	39,000	MM
Aug 06, 2015	New Machine	12,460	HY
Dec 01, 2013	Used Desk	1,910	MQ

Please return on the Form 4562 (2015)

MACRS and Averaging Conventions: Howard Fields (SSN 748-29-4631) operates the U.B. Fields Company as a sole proprietorship. H.B. Fields has the following depreciable property. The auto is used 100% for business. Howard has written evidence of the business use, which was 19,280 miles in 2015. He has another vehicle he uses for personal use. Using this information, prepare Howard's 2015 Form 4562, Depreciation and Amortization. 10 points possible. Date of Acquisition January 30, 2014 March 10, 2015 August 6, 2015 December 1, 2013 Item Used car Garage for auto New machine Used desk Cost $24,000 39,000 12,460 1,910 Averaging Convention HY MM HY MQ The auto is considered listed property and subject to the luxury auto rules. So the depreciation deduction for year 2 is the lesser of the MACRS depreciation or the luxury auto depreciation limits from 802.09. Listed property is included in Part V of Form 4562 and the depreciation deduction brought forward to line 21, Part IV. The garage is real property that should be depreciated using the straight-line method for the number of years for non-residential real property. Note that the property was placed into service March 10 of the tax year so was in service 9 and months for MACRS purposes (see Example 24 on page 19 of chapter 8). Take bonus depreciation on the new machine (50%) and depreciate the remaining basis using 7-year recovery period (Figure 8-1 in chapter 8). Bonus depreciation is located in Part II. The office desk was placed in service in 2013 so this is the third year of depreciation. The desk triggered the mid-quarter convention rules when it was placed in service. Use Figure 8-2 to find the rate of depreciation for the third year. Only the depreciation on the garage and the machine goes in Part III. The depreciation on the desk goes in that section for property placed in service prior to 2015. Look at the filled-in example of Form 4562 on pages 24 and 25 in chapter 8 of your textbook for additional guidance about the location of the amounts and other data to complete this problem. Form 4562 Depreciation and Amortization Attach Information to your tax return. about Form 4562 and its separate instructions is at www.irs.gov/form4562. Name(s) shown on return Business or activity to which this form relates HOWARD FIELDS U.B. FIELDS COMPANY 1 2 3 4 5 748-29-4631 Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. (a) Description of property (b) Cost (business use only) . . . . . . . . . . . . married . . . . . . . . . . . filing . . 1 2 3 4 5 (c) Elected cost 7 Listed property. Enter the amount from line 29 . . . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . . . . . . 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . 10 Carryover of disallowed deduction from line 13 of your 2014 Form 4562 . . . . . . . . . . . 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 . . . . . 13 13 Carryover of disallowed deduction to 2016. Add lines 9 and 10, less line 12 Note: Do not use Part II or Part III below for listed property. Instead, use Part V. Part II Attachment Sequence No. 179 Identifying number Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . Total cost of section 179 property placed in service (see instructions) . . . . . . Threshold cost of section 179 property before reduction in limitation (see instructions) . Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If separately, see instructions . . . . . . . . . . . . . . . . . . . . 6 2015 (Including Information on Listed Property) Department of the Treasury Internal Revenue Service (99) Part I OMB No. 1545-0172 8 9 10 11 12 Special Depreciation Allowance and Other Depreciation (Do not include listed property.) (See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) . . . . . . . . . . . . . . . . . . . . . . 15 Property subject to section 168(f)(1) election . 16 Other depreciation (including ACRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 16 Part III MACRS Depreciation (Do not include listed property.) (See instructions.) Section A 17 17 MACRS deductions for assets placed in service in tax years beginning before 2015 . . . . . . . 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here . . . . . . . . . . . . . . . . . . . . . . Section BAssets Placed in Service During 2015 Tax Year Using the General Depreciation System (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (business/investment use onlysee instructions) 19a b c d e f g h 3-year property 5-year property 7-year property 10-year property 15-year property 20-year property 25-year property Residential rental property i Nonresidential real property (d) Recovery period 25 yrs. 27.5 yrs. 27.5 yrs. 39 yrs. (e) Convention (f) Method MM MM MM MM S/L S/L S/L S/L S/L (g) Depreciation deduction Section CAssets Placed in Service During 2015 Tax Year Using the Alternative Depreciation System S/L 20a Class life 12 yrs. S/L b 12-year 40 yrs. MM S/L c 40-year Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 . . . . . . . . . . . . . . . . . . . . 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporationssee instructions . 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N 21 22 Form 4562 (2015) Page 2 Listed Property (Include automobiles, certain other vehicles, certain aircraft, certain computers, and property used for entertainment, recreation, or amusement.) Form 4562 (2015) Part V Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section ADepreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? 24b If \"Yes,\" is the evidence written? Yes No Yes (c) (a) (b) Business/ (d) Type of property (list Date placed investment use Cost or other basis vehicles first) in service percentage (e) Basis for depreciation (business/investment use only) (f) Recovery period (g) Method/ Convention (h) Depreciation deduction No (i) Elected section 179 cost 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . 25 26 Property used more than 50% in a qualified business use: % % % 27 Property used 50% or less in a qualified business use: S/L - % S/L - % S/L - % 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 . . . . . . . . . . . . 29 Section BInformation on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other \"more than 5% owner,\" or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) Vehicle 1 30 Total business/investment miles driven during the year (do not include commuting miles) . 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven . . . . . . . . . 33 Total miles driven during the year. Add lines 30 through 32 . . . . . . . 34 Was the vehicle available for personal use during off-duty hours? . . . . . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . Yes No (b) Vehicle 2 Yes No (c) Vehicle 3 Yes (d) Vehicle 4 No Yes No (e) Vehicle 5 Yes (f) Vehicle 6 No Yes No 36 Is another vehicle available for personal use? Section CQuestions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see instructions). No 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners . . 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions.) . . Note: If your answer to 37, 38, 39, 40, or 41 is \"Yes,\" do not complete Section B for the covered vehicles. . Part VI Amortization (a) Description of costs (b) Date amortization begins (c) Amortizable amount (e) Amortization period or percentage (d) Code section (f) Amortization for this year 42 Amortization of costs that begins during your 2015 tax year (see instructions): 43 Amortization of costs that began before your 2015 tax year . . . . . . 44 Total. Add amounts in column (f). See the instructions for where to report . . . . . . . . . . . . . . . 43 44 Form 4562 (2015)