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Tom Tom LLC purchased a rental house and land during the current year for $182,000. The purchase price was allocated as follows: $116,000 to the building and $66,000 to the land. The property was placed in service on May 22. Calculate Tom Tom's maximum depreciation for this first year. (Use MACRS Table 3.) (Round final answer to the nearest whole number.) 26 Skipped Multiple Choice eBook O $1,862 O $2,637. O $2,921 O $4,137. TABLE 3 Residential Rental Property Mid-Month Convention Straight Line-27.5 Years Month 1 Month 2 Month 3 Year 1 | 3.485% 3.182% 2.879% Year 2-9 3.6363.636 3.636 Year 10 3.637 3.637 3.637 Year 11 3.636 3.636 3.636 Year 12 3.637 3.637 3.637 Month Property Placed in Service Month 4 Month 5 Month 6 Month 7 2.576% 2.273% 1.970% 1.667% 3.636 | 3.636 3.636 3.636 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.636 Month 8 Month 9 Month 10 Month 11 Month 12 1.364% 1.061% 0.758% 0.455% 0.152% 3.636 3.6363.6363.636 3.636 3.636 3.636 | 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 3.6363.6363.636 3.636 Year 133 .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 3.6373.637 3.6373.637 3.636 Year 15 3.636 3.636 | 3.636 3.636 3 .636 3.636 3 .637 Year 16 3.637 3.637 3.637 3.637 3.637 3.637 3.636 Year 17 3.636 | 3.6363.6363.6363.636 3.6363.637 Year 18 3.637 3.637 3.637 3.637 3.637 3.637 3.636 Year 19 3.6363.6363.6363.6363.6363.6363.637 Year 20 13.637 3.637 3.637 3.637 3.637 3.637 3.636 Year 21 3.636 3.636 3.636 3.636 3.636 3.636 3.637 Year 22 3.6373.637 3.6373.6373 .6373 .637 3.636 Year 23 3.636 3.636 3.636 3.636 3.636 3.636 3.637 Year 24 3.637 3.637 3.637 3.637 3.637 3.637 3.636 Year 25 3.636 3,636 3.636 3.636 3.636 3.636 3.637 Year 26 3.637 3.637 3.637 3.637 3.637 3.637 3.636 Year 27 3.636 3 .636 | 3.6363.6363.6363.636 3.637 Year 28 1 1.97 2.273 | 2.576 2.879 3.182 3.485 3.636 Year 29 0.152 3.6363.636 3.6363.6363.636 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3,636 3.6373.6373.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.6373.6373.6373.637 3.636 3.636 3.636 3.636 3.636 13.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 | 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 13.637 3.637 3.636 3.636 3.636 3.636 3.636 3 .637 3.637 3.637 3.637 3.637 3.636 3.6363.636 3.636 3.636 0.455 0.758 1.061 1.364 1.667 27 Bonnie Jo purchased a used camera (five-year property) for use in her sole proprietorship. The basis of the camera was $4,300. Bonnie Jo used the camera in her business 60 percent of the time and used it for personal purposes the rest of the time during the first year. Calculate Bonnie Jo's depreciation deduction during the first year, assuming the sole proprietorship had a loss during the year. (Bonnie did not place the property in service in the last quarter.) (Use MACRS Table 1.) Skipped Multiple Choice eBook $430. $516. $860. $4,300. Table 1 MACRS Half-Year Convention 20-Year 3.750% 7.219 6.677 17.70 6.177 6.93 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year | 15-Year 33.33% 33% 20.00% 20.00% 14.29% 14.29% 10.00% 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 11.52 8.93 9 .22 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 5.713 5.285 4.888 4.522 4.462 4.461 Year 12 Year 13 Year 14 Year 15 Year 16 4.462 4.461 4.462 4.461 4.462 4.461 5.91 2.95 Year 17 4.462 Year 18 Year 19 Year 20 Year 21 4.461 4.462 4.461 2.231 Potomac LLC purchased an automobile for $31,600 on August 5, 2019. What is Potomac's depreciation deduction for 2019? (Ignore any possible bonus depreciation.) (Use MACRS Table 1 and Exhibit 10-10.) 28 Skipped Multiple Choice eBook 0 $10,000 $4,516. o o $6,320. $31,600. Table 1 MACRS Half-Year Convention Year 1 3-Year 33.33% 44.45 15-Year 20-Year 5.00% 13.750% 9.50 7.219 Year 2 Year 3 14.81 8.55 6.677 Year 4 L 7.41 Year 5 Depreciation Rate for Recovery Period 5-Year 7-Year 10-Year 20.00% 14.29% 10.00% 32.00 18.00 19.20 17.49 14.40 11.52 11.52 11.52 8.93 9.22 5.76 8.92 7.37 8.93 6.55 4.46 6.55 6.56 6.55 | 3.28 3.28 | 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 6.177 5.713 5.285 4.888 4.522 4.462 4.461 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 4.462 5.90 4.461 5.91 4.462 4.461 5.90 5.91 2.95 4.462 4.461 Year 17 4.462 Year 18 4.461 4.462 Year 19 Year 20 Year 21 4.461 2.231 EXHIBIT 10-10 Automobile Depreciation Limits Recovery Year 1 Recovery Year 2 Recovery Year 3 Recovery Year 4 and after 2019* 10,000** 16,000 9,600 5,760 Year Placed in Service 2018 2017 10,000* 3,160* 16,000 5,100 9,600 3,050 5 ,760 1,875 1 2016 3,160* 5,100 3,050 1,875 *As of press date, the IRS had not released the 2019 limitations for automobiles, so throughout the chapter we use the same limitations as in 2018 for 2019. **$8,000 additional depreciation is allowed when bonus depreciation is claimed ($168(k)(2)(F)]

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