Problem 8-4 Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)

On July 8, 2020, Holly purchased a residential apartment building. The cost basis assigned to the building is $750,000. Holly also owns another residential apartment building that she purchased on November 15, 2020, with a cost basis of $410,000.

Click here to access the depreciation tables. Round your answers to the nearest dollar.

a. Calculate Holly's total depreciation deduction for the apartments for 2020 using MACRS. $___________________

b. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS. $____________________

Problem 8-4(Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)

On September 14, 2020, Jay purchased a passenger automobile that is used 75 percent in his business. The automobile has a basis for depreciation purposes of $45,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179.

Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.

Calculate Jay's depreciation deduction for 2020 assuming bonus depreciation. $_____________

HERE ARE THE TABLES

MAY YOU PLEASE SHOW ME HOW YOU GOT YOUR ANSWERS

TABLE 8.2 Recovery Year 1 2 3 20-Year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4 Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986) 3-Year 5-Year 7-Year 10-Year 15-Year (200% DB) (200% DB) (200% DB) (200% DB) (150% DB) 33.33 20.00 14.29 10.00 5.00 44.45 32.00 24.49 18.00 9.50 14.81 % 19.20 17.49 14.40 8.55 7.41 11.52 12.49 11.52 7.70 11.52 8.93 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55 5.90 * 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 2.95 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 4.462 * 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 20 21 *Switch to straight-line depreciation. ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONS Year of Use 2019 and 2020 Limits Year 1 $18,100* Year 2 16.100 Year 3 9,700 Year 4 (and subsequent 5,760 years until fully depreciated) *Additional bonus depreciation of $8,000 is included in this amount