Year of Use Year 1 Year 2 Year 3 ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS 2021 Limits $18,200* Year 4 (and subsequent years until fully depreciated) *Additional bonus depreciation of $8,000 is included in this amount. 16,400 9,800 5,860 Problem 8-11 Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 8.2, 8.4, 8.5) During 2021, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business: Item Date Acquired Cost Manufacturing equipment (7 year) June 2 $50,000 Office furniture September 15 8,000 Office computer November 18 2,000 Passenger automobile (used 85 percent for business) May 31 55,000 Warehouse July 23 Building Land 170,000 135,000 Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense and elects out of a bonus depreciation. Use Form 4562 to report Pepe's depreciation expense for 2021. Enter all amounts as positive numbers. If required, round to the nearest dollar. If an amount is zero, enter "0". Click on the following links to access: Depreciation tables Annual automobile depreciation limitations Table 8.1: Recovery Periods for Assets Placed in Service After 1986