FINANCIAL ACCOUNTING
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ISBN: 9781259964947
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Transcribed Image Text:### MACRS Mid-Quarter Convention Tables
These tables show the Modified Accelerated Cost Recovery System (MACRS) depreciation rates under the Mid-Quarter Convention for different recovery periods and placement quarters.
#### Table 2a: First Quarter
**For property placed in service during the first quarter**
| Year | 5-Year (%) | 7-Year (%) |
|------|------------|------------|
| 1 | 25.00 | 17.85 |
| 2 | 30.00 | 23.47 |
| 3 | 18.00 | 16.76 |
| 4 | 11.37 | 11.97 |
| 5 | 11.37 | 8.87 |
| 6 | 4.26 | 8.87 |
| 7 | | 8.87 |
| 8 | | 3.34 |
#### Table 2b: Second Quarter
**For property placed in service during the second quarter**
| Year | 5-Year (%) | 7-Year (%) |
|------|------------|------------|
| 1 | 15.00 | 10.71 |
| 2 | 34.00 | 25.51 |
| 3 | 20.40 | 18.22 |
| 4 | 12.24 | 13.02 |
| 5 | 11.30 | 9.30 |
| 6 | 7.06 | 8.85 |
| 7 | | 8.86 |
| 8 | | 5.53 |
#### Table 2c: Third Quarter
**For property placed in service during the third quarter**
| Year | 5-Year (%) | 7-Year (%) |
|------|------------|------------|
| 1 | 5.00 | 3.57 |
| 2 | 38.00 | 27.55 |
| 3 | 22.80 | 19.68 |
| 4 | 13.68 | 14.06 |
| 5 | 10.94 | 10.04 |
![**Business Asset Depreciation Example**
Lina purchased a new car for use in her business during 2021. The car was the only business asset she acquired that year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022. Lina doesn’t want to take bonus depreciation for 2021 or 2022 in the following scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.)
**Scenario:**
d. The vehicle cost $92,000, and she used it 80 percent for business purposes. She sold it on March 1 of year 2.
**Depreciation Deduction Table:**
- Year: 2021
- Depreciation Deduction: [Blank space]
- Year: 2022
- Depreciation Deduction: [Blank space]
Note: The table indicates that there are amount placeholders for the depreciation deductions for each year, which need to be calculated using the MACRS tables and the specified conditions.](https://content.bartleby.com/qna-images/question/185af0e3-ec3f-47b9-bb7b-4ada95bc1144/127316ea-45f5-4679-9130-f679c938f80e/q6h1xkf_processed.png)
Transcribed Image Text:**Business Asset Depreciation Example**
Lina purchased a new car for use in her business during 2021. The car was the only business asset she acquired that year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022. Lina doesn’t want to take bonus depreciation for 2021 or 2022 in the following scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.)
**Scenario:**
d. The vehicle cost $92,000, and she used it 80 percent for business purposes. She sold it on March 1 of year 2.
**Depreciation Deduction Table:**
- Year: 2021
- Depreciation Deduction: [Blank space]
- Year: 2022
- Depreciation Deduction: [Blank space]
Note: The table indicates that there are amount placeholders for the depreciation deductions for each year, which need to be calculated using the MACRS tables and the specified conditions.
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