Question

G, a calendar year taxpayer, purchased $1,496,000 of equipment on March 23, its only purchase for the year. If the equipment is 7-year property, how much are first and second year MACRS depreciation? Assume Section 179 and bonus do not apply.

Group of answer choices

First year $213,778; second year $366,370

First year $213,778; second year $183,185

First year $106,889; second year $340,193

First year $106,889; second year $366,370

Answer 1

As per Table of Internal Revenue Service (IRS) publishes detailed.

MACRS applicable percentage for property class

Recovery Year	3-Year	5-Year	7-Year	10-Year	15-Year	20-Year
1	33.33	20.00	14.29	10.00	5.00	3.750
2	44.45	32.00	24.49	18.00	9.50	7.219
3	14.81 *	19.20	17.49	14.40	8.55	6.677
4	7.41	11.52 *	12.49	11.52	7.70	6.177
5		11.52	8.93 *	9.22	6.93	5.713
6		5.76	8.92	7.37	6.23	5.285
7			8.93	6.55 *	5.90 *	4.888
8			4.46	6.55	5.90	4.522
9				6.56	5.91	4.462 *
10				6.55	5.90	4.461
11				3.28	5.91	4.462
12					5.90	4.461
13					5.91	4.462
14					5.90	4.461
15					5.91	4.462
16					2.95	4.461
17						4.462
18						4.461
19						4.462
20						4.461
21						2.231

In view of above table the depreciation calculated as follows:

for 1st Year $1496000*14.29%= $ 213778

for 2nd Year $ 1496000*24.49%= $ 366370

Therefore the first group of answer will be correct First year $213,778; second year $366,370.