MACRS (LO. 6) Harold purchases the following business assets on the dates indicated: Asset Date Purchased Cost Recovery Period Photocopy equipment 2/14/20 $50,000 5 Dump truck 7/16/20 $300,000 5 Bus 12/24/20 $1,041,000 5 Refer to the MACRS Depreciation Tables to answer the following questions. Hint: Consider the percentage of cost per quarter when determining the convertion a. Harold's 2020 cost-recovery deduction if he elects not to claim bonus depreciation and does not elect to expense any of the assets under Section 179 is 5 1,090,200 X b. What could Harold do to maximize his 2020 deduction? Because the calculation of purchases for purposes of the 40% rule uses the depreciable basis placed in service each quarter Harold can avoid the mid-quarter X convention by electing to expense $1,040,000 of the bus This reduces the depreciable basis of the bus to $1,000 and the total depreciable basis placed in service during the year to $351,000 Based on the election to expense determined above, Harold will be able to use the regular MACRS method. His total deduction is of depreciation in 2020 ( election to expense plus 351,000 X of regular MACRS cost-recovery) Feb Check My Wor Omore Check My Work uses romaning Previous