Problem 8-5 Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation, Election to...
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Accounting
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Modified Accelerated Cost Recovery System MACRS and Bonus Depreciation, Election to Expense Section LO
Mike purchases a new heavyduty truck fiveyear class recovery property for his delivery service on March No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations The truck has a depreciable basis of $ and an estimated useful life of five years. Assume halfyear convention for tax.
Click here to access the depreciation tables.
a Calculate the amount of depreciation for using the straightline depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense.
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b Calculate the amount of depreciation for including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables.
c Calculate the amount of depreciation for including the election to expense and depreciation that Mike could deduct. Assume no income limit on the expense election.
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