MACRS Class Lives and Recovery Periods Recovery Periods ADS 10 Class Life GDS Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 Descriptions of Assets 10 Office furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility steam production plant Gas utility distribution facilities Recreation 4 10 10 14 16 14 10 10 9.5 9.5 20 12 15 20 12 10 18 28 35 10 12 10 20 20 28 35 A manufacturer of aerospace products purchased three flexible assembly cells for $490,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $55,000 a. Determine the cost basis of the three cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year six? d. If the cells are sold to another company for $120,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business Click the icon to view the GDS Recovery Rates (k) a. The cost basis of the three cells is $114898 thousand. (Round to the nearest whole number.) GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 15-year3 0.0500 0.0950 0.0855 0.0770 0.0693 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 Year 3-year 7-yeara 0.1429 0.2449 0.1749 0.1249 0.0893 0.0892 0.0893 0.0446 10-year 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0656 0.0655 0.0328 20-yea 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 0.3333 0.4445 0.1481 0.0741 5-yea 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 7 9 12 13 15 17 18 20 21 These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000 o-These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places MACRS Class Lives and Recovery Periods Recovery Periods ADS 10 Class Life GDS Asset Class 00.11 00.12 00.22 00.23 00.241 00.242 00.26 01.1 10.0 13.2 13.3 15.0 22.3 24.4 28.0 30.1 32.2 34.0 36.0 37.11 37.2 48.12 49.13 49.21 79.0 Descriptions of Assets 10 Office furniture and equipment Information systems, including computers Automobiles, taxis Buses Light general purpose trucks Heavy general purpose trucks Tractor units for use over the road Agriculture Mining Production of petroleum and natural gas Petroleum refining Construction Manufacture of carpets Manufacture of wood products and furniture Manufacture of chemicals and allied products Manufacture of rubber products Manufacture of cement Manufacture of fabricated metal products Manufacture of electronic components, products, and systems Manufacture of motor vehicles Manufacture of aerospace products Telephone central office equipment Electric utility steam production plant Gas utility distribution facilities Recreation 4 10 10 14 16 14 10 10 9.5 9.5 20 12 15 20 12 10 18 28 35 10 12 10 20 20 28 35 A manufacturer of aerospace products purchased three flexible assembly cells for $490,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $55,000 a. Determine the cost basis of the three cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year six? d. If the cells are sold to another company for $120,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business Click the icon to view the GDS Recovery Rates (k) a. The cost basis of the three cells is $114898 thousand. (Round to the nearest whole number.) GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 15-year3 0.0500 0.0950 0.0855 0.0770 0.0693 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 Year 3-year 7-yeara 0.1429 0.2449 0.1749 0.1249 0.0893 0.0892 0.0893 0.0446 10-year 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0656 0.0655 0.0328 20-yea 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 0.3333 0.4445 0.1481 0.0741 5-yea 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 7 9 12 13 15 17 18 20 21 These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000 o-These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places