Below find the rates for 3 year and 5 year MACRS depreciation (half-year convention) Year 3 yr
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Below find the rates for 3 year and 5 year MACRS depreciation (half-year convention)
Year | 3 yr MACRS rate | 5 yr MACRS rate |
1 | 33.3% | 20% |
2 | 44.5% | 32% |
3 | 14.8% | 19.9% |
4 | 7.4% | 11.5% |
5 | 11.5% | |
6 | 5.8% |
A project under consideration by Khalia Corporation will require the purchase of new equipment at a cost of $1,000,000 with a 3 year economic life. Kalia's marginal tax rate is 25%. What is the difference in tax expense in the second year if depreciation is computed using MACRS rates rather than straight line?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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