Question

1. Poplock Corporation acquired and placed in service the following assets during the year, 2019:

Asset	Date Acquired	Cost Basis
Computer equipment	3/23	$7,000
Dog grooming furniture	5/12	$7,000
Pickup truck	9/17	$10,000
Commercial building	10/11	$270,000
Land (one acre)	10/11	$80,000

Assuming DLW does not elect §179 expensing or bonus depreciation. What is Poplock's year 2 total cost recovery for these assets?

2.

DLW Corporation acquired and placed in service the following assets during the year, 2019:

Asset	Date Acquired	Cost Basis
Computer equipment	2/17	$10,000
Furniture	5/12	$18,000
Commercial building	11/1	$270,000

Assuming DLW does not elect §179 expensing and elects not to use bonus depreciation, what is DLW’s year 3 cost recovery for each asset if DLW sells all of these assets on 1/23 of year 3?

Answer 1

1	Asset	Purchase Date	Quarter	Recovery Period (Years)	Original Basis (A)	Rate (B)	Depreciation (A)*(B)
	Computer equipment	Mar-23	1st	5	$ 7,000	32.00%	$ 2,240
	Dog grooming furniture	05-Dec	2nd	7	$ 7,000	24.49%	$ 1,714
	Pickup truck	Sep-17	3rd	5	$ 10,000	32.00%	$ 3,200
	Commercial building	10-Nov	4th	39	$ 270,000	2.564%	$ 6,923
							$ 14,077

2	Asset	Purchase Date	Recovery Period (Years)	Original Basis (A)	Rate (B)	Depreciation (A)*(B)
	Computer equipment	Feb-17	5	$ 10,000	19.20%	$ 1,920
	Furniture	05-Dec	7	$ 18,000	17.49%	$ 3,148
	Commercial building	11-Jan	39	$ 270,000	2.564%	$ 6,923
						$ 11,991