Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 7

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Modified Accelerated Cost Recovery System (MACRS), Listed Property, Limitation on Depreciation of Luxury Automobiles (LO 7.4, 7.6, 7.7) During 2017, Palo Fiero purchases the following property for use in his calendar year-end manufacturing business: Item Date Acquired Cost Manufacturing equipment (7 year) June 2 $38,000 Office furniture September 15 5,400 Office computer November 18 3,800 Passenger automobile (used 90 percent for business) May 31 35,600 Warehouse April 23 Building 170,000 Land 135,000 Palo uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense or take a bonus depreciation. Use Form 4562 to report Palo's depreciation expense for 2017. Enter all amounts as positive numbers. If required, round to the nearest dollar. If an amount is zero, enter "0". Click on the following links to access: Depreciation tables Annual automobile depreciation limitations

Table 7.1: Recovery Periods for Assets Placed in Service After 1986.