The tables have now been added! Thank you for your help in advanced!
start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Computers (5-year) Office equipment (7-year) Furniture (7-year) Start-up costs Purchase Date October 30, y1 October 30, Y1 October 30, Yl October 30, Y1 Basis $ 15,000 10,000 3,000 17,000 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,000, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full time after graduation. In the summer, they purchased a small van (for transportation, not considered a luxury auto) and a pinball machine (to help attract new employees). They bought the van on June 15, Y2, for $15,000 and spent $3,000 getting it ready to put into service. The pinball machine cost $4,000 and was placed in service on July 1, Y2. Year 2 Assets Purchase Date Basis Van June 15, 22 $ 18,000 Pinball machine (7-year) July 1, Y2 4,000 Customer list April 30, Y2 10,000 Assume that eSys Answers does not claim any $179 expense or bonus depreciation. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required: a. What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? c. What is eSys Answers's basis in each of its assets at the end of Y2? Complete this question by entering your answers in the tabs below. Req A Reqc What are the maximum cost recovery deductions for eSys Answers for Y1 and Y2? Recovery deductions Y 1 Y 2 c. What is eSys Answers's basis in each of its assets at the end of Y2? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A Reqc What is eSys Answers's basis in each of its assets at the end of Y2? Adjusted Basis Asset Original Basis Immediate Expense Year 1 Cost Recovery Year 2 Cost Recovery Yr 2 Ending Basis $ 15,000 Computer Equipment Office Equipment Furniture $ 10,000 3,000 $ $ $ 5,000 Start-up costs Van 17,000 18,000 $ Pinball machine $ 4,000 Customer List $ 10,000 Totals $ 77,000 $ 5,000 $ 0 $ 0 $ 0 Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 5.285 6.23 5.90 Year 7 8.93 6.55 4.888 Year 8 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 6.55 5.90 4.461 Year 11 3.28 5.91 4.462 Year 12 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 Year 17 4.462 Year 18 4.461 Year 19 4.462 Year 20 4.461 Year 21 2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-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 Year 8 3.34 TABLE 20 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 rvice 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 Line-27.5 Years Month 1 Month 3 Month 8 Month 9 Month 2 3.182% Month 4 2.576% Year 1 3.485% 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 1.364% 2.879% 3.636 1.061% Month 10 Month 11 Month 12 0.758% 0.455% 0.152% 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 Year 2-9 Year 10 3.637 3.637 3.637 3.637 3.636 3.636 Year 11 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 12 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 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 3.637 3.637 3.636 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3,636 3.636 3.637 3.636 3.636 3.636 3.636 3.637 3.636 3.637 3.637 3.637 3.636 3.637 3.636 3.637 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 3.637 3.636 3.637 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.637 3.636 3.637 3.637 3.636 3,637 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 3.637 3.637 3.636 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 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 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 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 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 22 Year 23 Year 24 Year 25 3.636 3.637 3.636 3.637 3,637 3.637 3.636 3.636 3,636 3.636 3.637 3.636 3.637 3.636 3.636 3.637 3.636 3.637 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.636 Year 26 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.636 Year 27 3.636 TT 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 28 1.97 2.273 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 IT 3.636 Year 29 0.152 0.455 0.758 1.061 1.364 1.667 Month 12 Month 10 0.661% 0.132% 3.175 3.175 3.175 Month 11 0.397% 3.175 3.175 3.174 3.175 3.174 3.175 3.175 3.175 3.174 3.174 3.175 3.175 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before 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 3.042% 2.778% 2.513% 2.249% 1.984% 1.720% 1.455% 1.190% 0.926% Year 2-7 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 Year 8 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.175 Year 9 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 10 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 11 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 12 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 13 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 14 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 15 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 16 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 17 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 18 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 19 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 20 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 21 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 22 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 23 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 Year 24 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 25 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 26 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 27 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 28 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 29 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 30 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 31 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.174 3.175 Year 33 0.132 0.397 0.661 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.174 3.174 3.175 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 0.926 1.190 1.455 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 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 Month 10 Month 11 Month 12 Year 1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107% Year 239 2.564 2.564 2.564 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 2.033 2.247 2.461
