TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service...
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TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993)
Month Property Placed in Service
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Year 1
2.461%
2.247%
2.033%
1.819%
1.605%
1.391%
1.177%
0.963%
0.749%
0.535%
0.321%
0.107%
Year 239
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
Year 40
0.107
0.321
0.535
0.749
0.963
1.177
1.391
1.605
1.819
2.033
2.247
2.461
DLW Corporation acquired and placed in service the following assets during the year:
Asset
Date Acquired
Cost Basis
Computer equipment
3/13
$ 15,200
Furniture
4/30
$ 20,500
Commercial building
11/18
$ 297,000
Assuming DLW does not elect 179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.
a. What is DLW's year 1 cost recovery for each asset?
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
33.33%
20.00%
14.29%
10.00%
5.00%
3.750%
Year 2
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
5.76
8.92
7.37
6.23
5.285
Year 7
8.93
6.55
5.90
4.888
Year 8
4.46
6.55
5.90
4.522
Year 9
6.56
5.91
4.462
Year 10
6.55
5.90
4.461
Year 11
3.28
5.91
4.462
Year 12
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
Year 17
4.462
Year 18
4.461
Year 19
4.462
Year 20
4.461
Year 21
2.231
TABLE 3 Residential Rental Property Mid-Month Convention Straight Line27.5 Years
Month Property Placed in Service
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Year 1
3.485%
3.182%
2.879%
2.576%
2.273%
1.970%
1.667%
1.364%
1.061%
0.758%
0.455%
0.152%
Year 2-9
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
Year 10
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 11
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 12
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 13
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 14
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 15
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 16
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 17
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 18
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 19
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 20
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 21
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 22
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 23
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 24
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 25
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 26
3.637
3.637
3.637
3.637
3.637
3.637
3.636
3.636
3.636
3.636
3.636
3.636
Year 27
3.636
3.636
3.636
3.636
3.636
3.636
3.637
3.637
3.637
3.637
3.637
3.637
Year 28
1.97
2.273
2.576
2.879
3.182
3.485
3.636
3.636
3.636
3.636
3.636
3.636
Year 29
0.152
0.455
0.758
1.061
1.364
1.667
TABLE 2 b MACRS Mid-Quarter Convention: For property placed in service during the second quarter TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Depreciation Rate for Recovery Period } \\ \hline & 5-Year & 7-Year \\ \hline Year 1 & 15.00% & 10.71% \\ \hline Year 2 & 34.00 & 25.51 \\ \hline Year 3 & 20.40 & 18.22 \\ \hline Year 4 & 12.24 & 13.02 \\ \hline Year 5 & 11.30 & 9.30 \\ \hline Year 6 & 7.06 & 8.85 \\ \hline Year 7 & & 8.86 \\ \hline Year 8 & & 5.53 \\ \hline \end{tabular} TABLE 2 d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Depreciation Rate for Recovery Period } \\ \hline & 5-Year & 7-Year \\ \hline Year 1 & 5.00% & 3.57% \\ \hline Year 2 & 38.00 & 27.55 \\ \hline Year 3 & 22.80 & 19.68 \\ \hline Year 4 & 13.68 & 14.06 \\ \hline Year 5 & 10.94 & 10.04 \\ \hline Year 6 & 9.58 & 8.73 \\ \hline Year 7 & & 8.73 \\ \hline Year 8 & & 7.64 \\ \hline \end{tabular}
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