MACRS and Averaging Conventions. (Objs. 1, 3, 5) Howard Fields (SSN 748-29?4631) operates

the H. B. Fields Company as a sole proprietorship. H.B. Fields has the following depreciable

property. Th e automobile is used 100% for business. Howard has written evidence of the

business use, which was 19,280 miles in 2014. He has another vehicle he uses for personal use.

Using this information, prepare Howard's 2014 Form 4562, Depreciation and Amortization.

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