Problem $8-5$

Modified Accelerated Cost Recovery System $($MACRS$)$ and Bonus Depreciation, Election to Expense $($Section $179)($LO $8\mathrm{.}2,8\mathrm{.}3)$

Mike purchases a new heavy$-$duty truck $($five$-$year class recovery property$)$ for his delivery service on March $30,2023.$ No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations$.$ The truck has a depreciable basis of $$50,000$ and an estimated useful life of five years. Assume half$-$year convention for tax.

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a$.$ Calculate the amount of depreciation for $2023$ using the straight$-$line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense.

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b$.$ Calculate the amount of depreciation for $2023,$ including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables.

c$.$ Calculate the amount of depreciation for $2023$ including the election to expense and depreciation that Mike could deduct. Assume no income limit on the expense election.