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Problem 8-5 Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation, Election to...

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Accounting

Problem 8-5
Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation, Election to Expense (Section 179)(LO 8.2,8.3)
Mike purchases a new heavy-duty truck (five-year class recovery property) for his delivery service on March 30,2023. No other assets were purchased during the year. 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 $50,000 and an estimated useful life of five years. Assume half-year convention for tax.
Click here to access the depreciation tables.
a. Calculate the amount of depreciation for 2023 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense.
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b. Calculate the amount of depreciation for 2023, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables.
c. Calculate the amount of depreciation for 2023 including the election to expense and depreciation that Mike could deduct. Assume no income limit on the expense election.
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