TABLE 17-1 MACRS Property Classes (Recovery Period) General Depreciation System 3-Year Property (3 years) Over-the-road tractors Some horses and hogs Special handling devices for the manufacture of food and beverages Specialty tools used in the manufacture of motor vehicles Specialty tools used in the manufacture of finished products made of plastic, rubber, glass, and metal 10-Year Property (10 years) Vessels, barges, and tugs Single-purpose agricultural structures Trees and vines bearing fruits or nuts Assets used in the production of grain, sugar, and vegetable oil products Assets used in petroleum refining Assets used in the manufacture and repair of ships, boats, and marine drilling rigs 25-Year Property (25 years) Municipal sewers Certain water utility property integral to the gathering, treatment, or commercial distribution of water 5-Year Property (5 years) Automobiles and taxis Buses and trucks Computers and peripherals Office machinery Breeding or dairy cattle, sheep and goats Airplanes (except those in commercial use) Trailers and trailer-mounted containers Assets used in construction Assets used in the manufacture of knitted goods, textile yams, carpets, medical and dental supplies, chemicals, and electronic components Assets used in radio and television broadcasting, and CATV 15-Year Property (15 years) Depreciable improvements made to land, such as shrubbery, fences, roads, and bridges Assets used to manufacture cement Gas and petroleum utility pipelines Industrial steam and electric generation and/ or distribution systems Water taxis and ferry boats Residential Rental Property (27.5 years) This is any building or structure, such as a rental home (including a mobile home), if 80% of its gross rental income for the tax year is from dwelling units. A dwelling unit is a house or an apartment used to provide living accommodations. 7-Year Property (7 years) Office furniture and fixtures Railroad cars and engines Commercial airplanes Assets used in the manufacture of wood, pulp, and paper products Assets used in printing and publishing Assets used in the production of tobacco, leather, stone, and steel products Assets used in the production of sporting goods, toys, jewelry, and musical instruments Assets used in theme and amusement parks, theaters, concert halls, and miniature golf courses 20-Year Property (20 years) Farm buildings Railroad structures and improvements Communication cable and long-line systems Water, electric, gas, and steam utility plants and equipment Nonresidential Real Property (39 years) This is property such as an office building, a store, or a warehouse that is not residential rental property. Recovery Year TABLE 17-2 Cost Recovery Percentage Table MACRS Depreciation Rate for Property Class 3-year 5-year 7-year 10-year 15-year 20-year 12345 68119 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% 44.45 32.00 24.49 18.00 9.50 7.219 14.81 19.20 17.49 14.40 8.55 6.677 7.41 11.52 12.49 11.52 7.70 6.177 11.52 8.93 9.22 6.93 5.713 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 6.56 5.91 4.462 10 11 6.55 5.90 4.461 3.28 5.91 I 4.462 5.90 4.461 12 13 14 15 16 17 18 19 20 21 5.91 4.462 5.90 4.461 5.91 4.462 2.95 4.461 4.462 4.461 4.462 4.461 Rust Industries purchased a wood pulp mixer for $20,000. Using the MACRS method, calculate the book value at the end of year 3. (Use Table 17-1 and Table 17-2 Round all dollar amounts to the nearest cent.) $5,760.00 $8,746,00 O $9,600.00 O $12,244.00 The price of a railroad car purchased by Rio Corporation was $72,600. Using the MACRS method, calculate the annual depreciation for year 3. (Use Table 17-1 and Table 17-2. Round all dollar amounts to the nearest cent.) $6,483.18 O $9,067.74 O $12,607.74 O $17,779.74