PROBLEM 1

A. For the properties listed below compute the depreciation taken over

the useful life of the property. Assume that all property is post-1986

property.

B. Include columns for the applicable AMT depreciation and the

determined by using strait line (SL) method under ADS.

PROPERTY

COST

PLACED IN SERVICE

Recovery Period, Convention, and Method (MACRS)

Tractor unit

19,000

15 Feb

3

Race horse over 2 years old

54,000

12 May

3

Computer

4,000

25 Nov

5

Luxury Automobile

67,800

15 May

-

General Purpose Truck

25,000

13 Oct

5

Office Desk

7,300

5 Jan

7

Office Safe

4,600

7 Sept

7

Light Boat

69,700

27 July

10

Petroleum Refining Instalation

154,000

15 June

10

Residental Rental Building

10,790,000

26 April

27.5

Nonresidental Rental Building

13,000,000

20 Nov

31.5

Abbreviation:

HY = half-year

MQ = mid-quarter

MM = mid-month

SL - strait line

DB - declining balance

Suggested Columns

Asset Description

Date Placed in Service

Cost Basis

Recovery Rate

MACRS Recovery Amount

MACRS Accumulated Depreciation

Adjusted Basis

AMT Rate

AMT Recovery Amount

AMT Accumulated Depreciation

AMT Adjustment

AMT Adjusted Basis

A. For the properties listed below compute the depreciation taken over the useful life of the property. Assume that all property is post-1986 property. B. Include columns for the applicable AMT depreciation and the determined by using strait line (SL) method under ADS