Debra acquired the following new assets during 2019.
Date | Asset | Cost |
---|---|---|
April 11 July 28 November 3 |
Furniture Trucks Computers |
$40,000 40,000 70,000 |
Determine Debra’s cost recovery deductions for the current year. Debra does not elect immediate expensing under § 179. She does not claim any available additional first-year depreciation.
In the given case, computers as acquired in the fourth quarter exceeds 40% of the cost of all personal property acquired during the year = 70,000/150,000 = 46.67%. Hence, as per provisions, mid-quarter convention shall be used.
Asset |
MACRs Workings |
Amount |
Furniture (7-year class) |
$40,000 x .1785 (placed in 2nd quarter) |
8925 |
Trucks (5-year class) |
$40,000 x .15 (placed in 3rd quarter) |
4500 |
Computers (5-year class) |
$70,000 x .05 (placed in 4th quarter) |
3000 |
Total cost recovery |
16,425 |
The rates has been taken from mid-quarter convention tables
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