The recently enacted tax law (2018) allows companies to use immediate write-off equipment purchases or what they call “bonus” depreciation. This “bonus” depreciation phases out over time and is eliminated by 2025. Assume that we are now in 2025, and the tax law has reverted to the MACRS system discussed in chapter 8 (which is the way the law is written). You place the following equipment into service in the following years with the following tax lives:

Year placed Tax life Cost

Into service

Computer 2025 3 year $48,000

Car 2026 5 year $65,000

Shelves 2027 7 year $98,000

What is the total depreciation expense allowed by the IRS for all three pieces of equipment for tax years 2028? __________________

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