question archive The corporatio uses MACRS depreciation for tax purposes
The corporatio uses MACRS depreciation for tax purposes
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The corporatio uses MACRS depreciation for tax purposes. The corporation purchased all of its equipment on July 1 2014. Corporation took the maximum amount of Section 179 depreciation (no bonus depreciation). The equipment is all 7 year property. Cost of the equipment $930,000.
What is the amount of depreciation for the tax year 2016?
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Answer:
Computation of half year convention method of depreciation under MACRS depreciation computation table is as under.
Depreciation for tax year 2016 is 162,682/-
| Year | Adjusted Basis | Rate % | Depreciation | Cumulative | Book Value | Method |
| 2014 | 930,000 | 14.29 | 132,857 | 132,857 | 797,143 | DB |
| 2015 | 797,143 | 24.49 | 227,755 | 360,612 | 569,388 | DB |
| 2016 | 569,388 | 17.49 | 162,682 | 523,294 | 406,706 | DB |
| 2017 | 406,706 | 12.49 | 116,202 | 639,496 | 290,504 | DB |
| 2018 | 290,504 | 8.92 | 83,001 | 722,497 | 207,503 | SL |
| 2019 | 207,503 | 8.92 | 83,001 | 805,498 | 124,502 | SL |
| 2020 | 124,502 | 8.92 | 83,001 | 888,499 | 41,501 | SL |
| 2021 | 41,501 | 4.46 | 41,501 | 930,000 | 0 | SL |
