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Posted on Jul 19, 2024

Required information [The following information applies to the questions displayed below.] DLW Corporation acquired and placed in service the following assets during the year: Asset

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Required information [The following information applies to the questions displayed below.] DLW Corporation acquired and placed in service the following assets during the year: Asset Computer equipment Furniture Commercial building Date Acquired 2/23 6/20 8/10 Cost Basis $ 13,500 $ 24,600 $ 335,000 Assuming DLW does not elect $179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) b. What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 5/4 of year 3? Answer is not complete. Asset Year 3 Cost Recovery 1,296 2,151 $ Computer equipment Furniture Commercial building Total $ 3,447 Table 1 MACRS Half-Year Convention 20-Year Year 1 Year 2 Year 3 3.750% 7.219 6.677 6.177 5.713 Year 4 Year 5 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 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 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 4.46 6.55 5.90 6.56 5.91 5.285 Year 6 Year 7 Year 8 4.888 4.522 4.462 4.461 6.55 5.90 3.28 5.91 4.462 5.90 5.91 4.461 4.462 4.461 5.90 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 5.91 4.462 2.95 4.461 4.462 4.461 4.462 4.461 2.231 7-Year TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 8 1.09 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7 8.87 Years 3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 34.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 8.85 Year 7 8.86 Year 8 5.53 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 5.00% 3.57% Year 2 38.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Year 5 10.94 10.04 Year 6 9.58 8.73 Year 7 8.73 Year 8 7.64 TABLE 3 Residential Rental Property Mid-Month Convention Straight Line27.5 Years Month 1 Month 2 Month 3 Month 4 Month S Yearl 3.182% 2.879% 2.576% Month Property Placed in Service Month 5 Month 6 Month 7 2.273% 1.970% 1.667% 3.636 3.636 3.636 3.637 3.637 3.636 3.485% 3.636 3.637 1.364% Month 9 Month 10 Month 11 1.061% 0.758% 0.455% 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 Month 12 0.152% 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 Year 2-9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 3.637 3.637 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.637 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 Year 16 Year 17 Year 18 Year 19 3.636 3.637 3.636 3.637 3.637 3.636 3.637 3.637 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 Year 20 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.637 3.636 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.637 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 2.273 1.97 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 3.636 T 0.152 0.455 0.758 1.061 1.364 1.667 Month 10 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Year 1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% Year 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 Year 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 Month 11 0.321% Month 12 0.107% 0.535% 2.564 2.033 2.564 2.564 2.247 2.461