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Convers Corporation (June 30 year-end) acquired the following assets during the current tax year (ignore $179...

Convers Corporation (June 30 year-end) acquired the following assets during the current tax year (ignore $179 expense and bonus depreciation for this problem): Asset, Placed in service, original basis-Machinery, Oct 17, 118000, Computer equipment, March 26, 16000, Used delivery truck*, Jan 27, 24250, Furniture, June 17, 194000, for a total of 352250. *The delivery truck is not a luxury automobile. What is the allowable MARCS depreciation on Conver's property in the current year?

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Answer #1

Convers is required to use mid quarter convetion becuase more than 40% of tangible asset is place in service in 4 quarter.

% of property placed in 4 quarter : 194000/352250=.5507 or 55.07%

Asset class under MACRS Placed in service quarter Basis Rates Basis *rate
Machinery 7 year oct 17 2 118000 17.85% 21063 [118000*.1785]
computer equipment 5 year march 26 3 16000 15% 2400 [16000*.15]
used delivery truck 5 year jan 27 3 24250 15% 3637.5
Furniture 7year jun 17 4 194000 3.57% 6925.8
352250 34026.3

allowable MARCS depreciation on Conver's property in the current year :$ 34026.30

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