Using the following formula, calculate the depreciation rate for an asset with an estimated useful life of 10 years for year 1 and 2:

Years remaining is Asset's Life/SYD = Depreciation Rate

and then you multiple the depreciation rate by the depreciable base to calculate the depreciation expense for that year.

* SYD = n(n+1)/2

		Year 1 1/10 Year 2 2/10
		Year 1 10/55 Year 2 9/55
		Year 1 9/55 Year 2 8/55
		Year 1 1/55 Year 2 2/55

2.Federal Income Tax Depreciation Rules

Table- Half-Year Convention

200% Declining Balance

Year	3 Year	5 Year	7 Year
1	33.33%	20.00%	14.29%
2	44.45%	32.00%	24.49%
3	14.81%	19.20%	17.49%
4	7.41%	11.52%	12.49%
5		11.52%	8.93%
6		5.76%	8.92%
7			8.93%
8			4.46%

1. Below are four asset purchases made in 2018.

Asset Cost Date

Office Table $1,000 January 1,

Office Desk 1,500 September 29

File Cabinet 2,000 October 15

Computer 6,000 December 31

What is the maximum 2018 Section 179 deduction for these purchases? How did you arrive at your answer?

3. Under MACRS and GAAP the acquisition cost is not fully depreciated leaving a residual value.

True

False

4.

Regardless of the purchase date, MACRS sets how much depreciation can be recorded in the first year, while GAAP accounts for the purchase date.

True

False

5.

A company can opt not to take the Bonus Depreciation by completing Form 4562, Depreciation and Amortization.

True

False

6.

The section 179 deduction is not beneficial for passenger autos in most cases.

True

False