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Save space by optimlzing storage. TABLE 7.1 Recovery Periods for Tangible Business Assets MACRS Recovery Period Assets Included Small manufacturing tools, racehorses and breeding hogs, special 3 years handling devices used in food manufacturing. 5 years Cars, trucks, buses, helicopters, computers, typewriters, duplicating equipment, breeding and dairy cattle, and cargo containers. 7 years Office furniture and fixtures, railroad cars and locomotives, most machinery and equipment. 10 years Single-purpose agricultural and horticultural structures; assets used in petroleum refining, vessels, barges, and other water transportation equipment; fruit- or nut-bearing trees and vines. 15 years Land improvements such as fencing, roads, sidewalks, bridges, irrigation systems, and landscaping; telephone distribution plants; pipelines; billboards; and service station buildings. 20 years Certain farm buildings, municipal sewers. Commercial water utility property. 25 years 27.5 years Residential rental real property (duplexes and apartments). 39 years Nonresidential real property (office buildings, factories, and warehouses) Railroad grading or tunnel bore 50 years 0 pixels Save spac MACRS for Business Personalty (Half-Year TABLE 7.2 Convention) Recovery Period 5-Year 3-Year 7-Year 10-Year 15-Year 20-Year Year Depreciation Rate 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% 1 32.00 18.00 7.219 2 44.45 24.49 9.50 3 14.81 17.49 8.55 19.20 14.40 6.677 4 7.41 11.52 12.49 11.52 7.70 6.177 5 8.93 9.22 11.52 6.93 5.713 6 5.76 7.37 6.23 5.285 8.92 7 8.93 4.888 6.55 5.90 4.46 5.90 6.55 4.522 4.462 6.56 5.91 5.90 4.461 10 6.55 11 3.28 5.91 4.462 12 5.90 4.461 13 5.91 4.462 5.90 4.461 14 15 5.91 4.462 4.461 16 2.95 17 4.462 4.461 18 19 4.462 4.461 20 2.231 21 In March 2018, Jones Company purchased a Mercedes for use in its business at a cost of $73,000. Assuming no bonus depreciation or Section 179 deduction, calculate the allowable tax depreciation on this asset for 2018, 2019, and 2020. Use Table 7-1 and Table 7-2 Use the below table for annual depreciation deduction for year 2018 to 2021: 2018 $10,000 16,000 9,600 5,760 2019 2020 2021 and subsequent years 2018 depreciation 2019 depreciation 2020 depreciation

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