Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2016. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Assume half-year convention for tax.
a. Calculate the amount of depreciation for 2016 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2016 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense.
c. Calculate the amount of depreciation for 2016, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables.
d. Calculate the amount of depreciation for 2016 including bonus depreciation and the election to expense that Mike could deduct. Assume no income limit on the expense election.