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In March 2019, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Assuming no bonus depreciation or Section 179

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In March 2019, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Assuming no bonus depreciation or Section 179 deduction calculate the allowable tax depreciation on this asset for 2019, 2020, and 2021. Use Table 7-1 and Table 7.2. Use the below table for annual depreciation deduction for year 2019 to 2022: 2019 2020 2021 2022 and subsequent years $10,100 16,100 9,700 5,760 Amount 2019 depreciation 2020 depreciation 2021 depreciation TABLE 7.1 Recovery Periods for Tangible Business Assets MACRS Recovery Period 3 years 5 years 7 years 10 years Assets Included Small manufacturing tools, racehorses and breeding hogs, special handling devices used in food manufacturing Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle, and cargo containers, new farming machinery and equipment Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment 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. Certain building improvements; land improvements such as fencing. roads, sidewalks, bridges, Irrigation systems, and landscaping telephone distribution plants, pipelines; billboards and service station buildings Certain farm buildings, municipal sewers. Commercial water utility property. Residential rental real property (duplexes and apartments) Nonresidential real property office buildings, factories, and Warehouses) Railroad grading or tunnel bore, 15 years 20 years 25 years 27.5 years 39 years 50 years Recovery Period TABLE 7.2 MACRS for Business Personalty (Hall-Year Convention) 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 5.76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Depreciation Rate 14.29% 10.00% 24.49 18.00 17.49 14.40 12.49 11.52 8.93 9.22 8.92 7.37 8.93 6.55 4.46 6.55 6.56 6.55 3.28 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 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

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