Lina purchased a new car for use in her business during 2019. The auto was the...
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Lina purchased a new car for use in her business during 2019. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2019 and 2020 (Lina doesn't want to take bonus depreciation for 2019 or 2020) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10) a. The vehicle cost $34,600 and business use is 100 percent (ignore $179 expense). Depreciation deduction Year 2019 2020 b. The vehicle cost $93,000, and business use is 100 percent. Depreciation deduction Year 2019 2020 c. The vehicle cost $93,000, and she used it 80 percent for business. Depreciation deduction Year 2019 2020 d. The vehicle cost $93,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2019 2020 e. The vehicle cost $93,000, and she used it 20 percent for business. Depreciation deduction Year 2019 2020 f. The vehicle cost $93,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent. Depreciation deduction Year 2019 2020 Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 Year 2 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 Year 7 Year 8 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 Year 11 Year 12 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 TABLE 2a MACRS Mid-Quarter Convention: For proper Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 8 1.09 TABLE 2b MACRS Mid-Quarter Convention: For prope Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Voom 11. 27 O 07 EXHIBIT 10-10 Automobile Depreciation Limits Year Placed in Service 2019* 2018 2017 2016 Recovery Year 1 Recovery Year 2 10,000** 10,000* 3,160* 3,160* 16,000 16,000 5,100 5,100 Recovery Year 3 9,600 9,600 3,050 3,050 Recovery Year 4 and after 5,760 5,760 1,875 1,875 * As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed [§168(k)(2)(F)]. Lina purchased a new car for use in her business during 2019. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2019 and 2020 (Lina doesn't want to take bonus depreciation for 2019 or 2020) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10) a. The vehicle cost $34,600 and business use is 100 percent (ignore $179 expense). Depreciation deduction Year 2019 2020 b. The vehicle cost $93,000, and business use is 100 percent. Depreciation deduction Year 2019 2020 c. The vehicle cost $93,000, and she used it 80 percent for business. Depreciation deduction Year 2019 2020 d. The vehicle cost $93,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2019 2020 e. The vehicle cost $93,000, and she used it 20 percent for business. Depreciation deduction Year 2019 2020 f. The vehicle cost $93,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent. Depreciation deduction Year 2019 2020 EXHIBIT 10-10 Automobile Depreciation Limits Year Placed in Service 2019* 2018 2017 2016 Recovery Year 1 Recovery Year 2 10,000** 10,000* 3,160* 3,160* 16,000 16,000 5,100 5,100 Recovery Year 3 9,600 9,600 3,050 3,050 Recovery Year 4 and after 5,760 5,760 1,875 1,875 * As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed [§168(k)(2)(F)]. Lina purchased a new car for use in her business during 2019. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2019 and 2020 (Lina doesn't want to take bonus depreciation for 2019 or 2020) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10) a. The vehicle cost $34,600 and business use is 100 percent (ignore $179 expense). Depreciation deduction Year 2019 2020 b. The vehicle cost $93,000, and business use is 100 percent. Depreciation deduction Year 2019 2020 c. The vehicle cost $93,000, and she used it 80 percent for business. Depreciation deduction Year 2019 2020 d. The vehicle cost $93,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2019 2020 e. The vehicle cost $93,000, and she used it 20 percent for business. Depreciation deduction Year 2019 2020 f. The vehicle cost $93,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent. Depreciation deduction Year 2019 2020 Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 Year 2 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 Year 7 Year 8 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 Year 11 Year 12 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 TABLE 2a MACRS Mid-Quarter Convention: For proper Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 8 1.09 TABLE 2b MACRS Mid-Quarter Convention: For prope Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Voom 11. 27 O 07 EXHIBIT 10-10 Automobile Depreciation Limits Year Placed in Service 2019* 2018 2017 2016 Recovery Year 1 Recovery Year 2 10,000** 10,000* 3,160* 3,160* 16,000 16,000 5,100 5,100 Recovery Year 3 9,600 9,600 3,050 3,050 Recovery Year 4 and after 5,760 5,760 1,875 1,875 * As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed [§168(k)(2)(F)]. Lina purchased a new car for use in her business during 2019. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2019 and 2020 (Lina doesn't want to take bonus depreciation for 2019 or 2020) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10) a. The vehicle cost $34,600 and business use is 100 percent (ignore $179 expense). Depreciation deduction Year 2019 2020 b. The vehicle cost $93,000, and business use is 100 percent. Depreciation deduction Year 2019 2020 c. The vehicle cost $93,000, and she used it 80 percent for business. Depreciation deduction Year 2019 2020 d. The vehicle cost $93,000, and she used it 80 percent for business. She sold it on March 1 of year 2. Depreciation deduction Year 2019 2020 e. The vehicle cost $93,000, and she used it 20 percent for business. Depreciation deduction Year 2019 2020 f. The vehicle cost $93,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent. Depreciation deduction Year 2019 2020 EXHIBIT 10-10 Automobile Depreciation Limits Year Placed in Service 2019* 2018 2017 2016 Recovery Year 1 Recovery Year 2 10,000** 10,000* 3,160* 3,160* 16,000 16,000 5,100 5,100 Recovery Year 3 9,600 9,600 3,050 3,050 Recovery Year 4 and after 5,760 5,760 1,875 1,875 * As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed [§168(k)(2)(F)].
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Related Book For
Essentials of Federal Taxation 2018
ISBN: 9781260007640
9th edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
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