Problem 8-10 Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 8.2, 8.4, 8.5) On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $43,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179. Click here to access the depreciation table and click here to access the annual automobile depreciation limitations. Calculate Jay's depreciation deduction for 2018 assuming bonus depreciation. TABLE 8.2 Recovery Year 20-Year (150% DB) 6.93 Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986) 3-Year 5-Year 7-Year 10-Year 15-Year (200% DB) (200% DB) (200% DB) (200% DB) (150% DB) 33.33 20.00 14.29 10.00 5.00 44.45 32.00 24.49 18.00 9.50 14.81 * 19.20 17.49 14.40 8.55 7.41 11.52 * 12.49 11.52 7.70 11.52 8.93 * 9.22 5.76 8.92 7.37 6.23 8.93 6.55 * 5.90 * 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 3.750 7.219 6.677 6.177 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 5.91 2.95 *Switch to straight-line depreciation. ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS-AUTOMOBILES ACQUIRED IN 2018 2018 Auto Depreciation Year 1 $18,000* Year 2 16,000 Year 3 9,600 Year 4 (and subsequent 5,760 years until fully depreciated) *Additional bonus depreciation of $8,000 is included in this amount