Question

Carl bought a heavy-duty truck (5-year class recovery property) for his business service on April 30. 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 $39,080 and an estimated useful life of five years. Its estimated salvage value is $1,080. Assume no election to expense is made and no bonus 50% depreciation deduction is elected. 1.

Calculate the amount of depreciation for the first year using financial accounting (not the straight-line MACRS election) straight-line depreciation over the truck’s estimated useful life. $__________
2.

Calculate the amount of depreciation for the first year using the straight-line depreciation election under MACRS over the minimum number of years. $__________
3.

Calculate the amount of accelerated depreciation for the first year that can be deducted using MACRS. $__________

Answer 1

1. 633