Problem 8-46 (LO. 4)
On June 5, 2018, Leo purchased and placed in service a new car that cost $75,000. The business use percentage for the car is always 100%. Leo does not claim any available additional first-year depreciation or any 179.
If required, round your answers to the nearest dollar.
Click here to access the depreciation table to use for this problem. Click here to access the limits for certain automobiles.
a. What MACRS convention applies to the new car? Half-year
b. Is the automobile considered "listed property"? Yes
c. Leo's cost recovery deduction in 2018 is $ 10,000 and for 2019 is $____________.
Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 2 3 4 5 6 7 8 9 10 11 12 2-18 19-27 3.485 3.636 3.637 1.970 0.000 3.182 3.636 3.637 2.273 0.000 2.8792.576 3.636 3.636 3.637 3.637 2.576 2.879 0.000 0.000 2.273 3.636 3.637 3.182 0.000 1.970 1.667 3.636 3.636 3.6373.637 3.485 3.636 0.000 0.152 1.364 3.636 3.637 3.636 0.455 1.061 3.636 3.637 3.636 0.758 0.7580.455 3.636 3.636 3.637 3.637 3.636 3.636 1.061 1.364 0.152 3.636 3.637 3.636 1.667 28 29 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3 .175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0.661 0.926 1.190 1.455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 2.461 2.247 2.033 1.819 1.605 1.391 1.177 0.963 0.749 0.5350.321 0.107 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.7490.963 1.177 1.391 1.605 1.819 2.0332.247 2.461 Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 2 3 4 5 6 7 8 9 10 11 12 2-18 19-27 3.485 3.636 3.637 1.970 0.000 3.182 3.636 3.637 2.273 0.000 2.8792.576 3.636 3.636 3.637 3.637 2.576 2.879 0.000 0.000 2.273 3.636 3.637 3.182 0.000 1.970 1.667 3.636 3.636 3.6373.637 3.485 3.636 0.000 0.152 1.364 3.636 3.637 3.636 0.455 1.061 3.636 3.637 3.636 0.758 0.7580.455 3.636 3.636 3.637 3.637 3.636 3.636 1.061 1.364 0.152 3.636 3.637 3.636 1.667 28 29 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3 .175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0.661 0.926 1.190 1.455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 2.461 2.247 2.033 1.819 1.605 1.391 1.177 0.963 0.749 0.5350.321 0.107 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.7490.963 1.177 1.391 1.605 1.819 2.0332.247 2.461
