Problem 10-60 (LO 10-2, LO 10-3) Assume that ACW Corporation has 2018 taxable income of $1,200,000 for purposes of computing the 179 expense. The company acquired the following assets during 2018 (assume no bonus depreciation): (Use MACRS Table 1 Table 2, and Table 5). Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2) ints Placed in Service Basis $490,000 Asset Machinery Computer equipment Delivery truck Qualified improvement property Total 12-Sep 10-Feb 21-Aug 90,00 113,000 1,400,00e $2,093,000 a. What is the maximum amount of $179 expense ACW may deduct for 2018 b. What is the maximum total depreciation that ACW may deduct in 2018 on the assets it placed in service in 2018? (Round your intermediate computations to the nearest whole dollar amount.) Answer is complete but not entirely correct $ 248,000 $179 expense for 2018 Total deductible depreciation for S 1,957,565 2018 TABLE 1 MACRS Half Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 3.750% 7.219 6.677 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 14.29% 20.00% 32.00 19.20 11.52 11.52 5.76 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 33.33% 44.45 14.81 7.41 24.49 2 3 4 17.49 12.49 8.93 8.92 8.93 4.46 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 6 8 9 10 20 21 ABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year 35.00% 26.00 5.60 11.01 11.01 1.38 25.00% 21.43 5.31 10.93 8.75 8.74 875 1.09 ABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year 25.00% 30.00 18.00 11.37 11.37 4.26 17.85% 23.47 6.76 11.97 8.87 8.87 8.87 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year 15.00% 34.00 20.40 12.24 1.30 7.06 10.71% 25.51 18.22 13.02 9.30 8.85 8.86 ABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period Year 5-Year 7-Year 38.00 22.80 13.68 10.94 9.58 27.55 19.68 14.06 10.04 8.73 8.73 7.64 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service 2 4 5 12 6 1.391% 2.564 Year 8 9 10 2-39 40 2.461% 2.564 0.107 2.247% 2564 0.321 2.033% 2.564 0.535 1.819% 2.564 0.749 1.605% 2.564 0.963 1.177% 2.564 1.391 0.963% 2.564 1.605 0749% 2.564 1.819 0.535% 2.564 2.033 0.321 % 2.564 2.247 0.1 07% 2.564 2.461
