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Steve Edwards Enterprises is a sole proprietorship. It is planning to purchase a significant amount of property this year, all of which will be classified
Steve Edwards Enterprises is a sole proprietorship. It is planning to purchase a significant amount of property this year, all of which will be classified as 5-year property for purposes of MACRS depreciation. It would like to know the difference in the total first- and second-year depreciation deductions resulting from the two cost acquisition patterns outlined below:
(Ignore bonus depreciation and Section 179.)
| Property Acquisition Dates |
| Plan A |
| Plan B |
| 1/28 |
| $250,000 |
| $ 75,000 |
| 5/15 |
| 120,000 |
| 250,000 |
| 10/6 |
| 180,000 |
| 225,000 |
|
|
| $550,000 |
| $550,000 |
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