60.1K

Verified Solution

Link Copied!

5. Blue Corporation purchased an asset at a cost of $65,000 on March 1, 2020. The asset has a useful life of 8 years and a salvage value of $5,200. For tax purposes, the MACRS class life is 5 years.

MACRS Depreciation Rates by Class of Property
Recovery		3-year		5-year		7-year		10-year		15-year		20-year
Year		(200% DB)		(200% DB)		(200% DB)		(200% DB)		(150% DB)		(150% DB)
1		33.33		20.00		14.29		10.00		5.00		3.750
2		44.45		32.00		24.29		18.00		9.50		7.219
3		14.81*		19.20		17.49		14.40		8.55		6.677
4		7.41		11.52*		12.49		11.52		7.70		6.177
5				11.52		8.93*		9.22		6.93		5.713
6				5.76		8.92		7.37		6.23		5.285
7						8.93		6.55*		5.90*		4.888
8						4.46		6.55		5.90		4.522
9								6.56		5.91		4.462*
10								6.55		5.90		4.461
11								3.28		5.91		4.462
12										5.90		4.461
13										5.91		4.462
14										5.90		4.461
15										5.91		4.462
16										2.95		4.461
17												4.462
18												4.461
19												4.462
20												4.461
21												2.231

*Switchover to straight-line depreciation.

Compute tax depreciation for each year 2020-2025.

Tax depreciation for 2020: $

Tax depreciation for 2021: $

Tax depreciation for 2022: $

Tax depreciation for 2023: $

Tax depreciation for 2024: $

Tax depreciation for 2025: $

Answer & Explanation Solved by verified expert

See Answer