Question

Way Corporation disposed of the following tangible personal property assets in the current year.

	Date	Date		Original
Asset	Acquired	Sold	Convention	Basis
Furniture (7-year)	5/12/15	7/15/19	HY	$	115,000
Machinery (7-year)	3/23/16	3/15/19	MQ		132,000
Delivery truck* (5-year)	9/17/17	3/13/19	HY		68,000
Machinery (7-year)	10/11/18	8/11/19	MQ		332,400
Computer (5-year)	10/11/19	12/15/19	HY		128,000

*Used 100 percent for business.

Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2019 depreciation deduction (ignore §179 expense and bonus depreciation for this problem). (Use MACRS Table 1, Table 2, and Exhibit 10-6.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

    

Answer 1

Computation of Way corporation's 2019 depreciation deduction

Asset	Original Basis ($)	Rate (%)	Quarter if mid quarter	Portion of the year	Depreciation ($)
Furniture	115000	8.93	na	50%	5135 ($115000 X 8.93% X 50%)
Machinery	132000	10.93	First	12.5%	1803 ($132000 X 10.93% X 12.5%)
Delivery Truck	68000	19.2	na	50%	6528 ($68000 X 19.2% X 50%)
Machinery	332400	27.55	Fourth	62.5%	57235 ($332400 X 27.55% X 62.5%)
Computer	128000	0	na	50%	0 (acquired and disposed in same year, so 0 depreciaiton)
TOTAL					$70701