Question

Convers Corporation (June 30 year-end) acquired the following assets during the current tax year (ignore §179 expense and bonus depreciation for this problem):

	Placed in		Original
Asset	Service Date		Basis
Machinery	October 17	$	118,000
Computer equipment	March 26		16,000
Used delivery truck*	January 27		24,250
Furniture	June 17		194,000
Total		$	352,250

*The delivery truck is not a luxury automobile.

What is the allowable MACRS depreciation on Convers’s property in the current year? (Use MACRS Table 1, Table 2, Table 3, Table 4and Table 5.) (Round your intermediate dollar calculations and final answer to the nearest whole dollar amount.)

Answer 1

		A			B	A x B
Asset	Placed in Service Date	Original Basis	Quarter	MACRS Year	MACRS Rate	Depreciation
Machinery	October 17	$118,000.00	2	7	17.85%	$21,063.00
Computer equipment	March 26	$16,000.00	3	5	15.00%	$2,400.00
Used delivery truck*	January 27	$24,250.00	3	5	15.00%	$3,637.50
Furniture	June 17	$194,000.00	4	7	3.57%	$6,925.80
Total		$352,250.00				$34,026
Mid-quarter convention is used because greater than 40 percent of tangible personal property was placed in service during its 4th quarter.
Convers placed 55.07% ($194,000 /$352,250) of its tangible personal property in service during the 4th quarter (April – June)