Listed property and luxury automobile limitations

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Reference no: EM13750018

Mike purchased a heavy-duty truck (five year class recovery property) for his delivery service on April 30,2014. 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 5 years. Assume half-year convention for tax and no election to expense is made.

a. Calculate the amount of depreciation for 2014 using financial accounting (not the straight-line MACRS election) straight-line depreciation over the truck’s estimated useful life.

b. Calculate the amount of depreciation for 2014 using the straight-line depreciation election under MACRS tables over the minimum number of years.

c. Calculate the amount of accelerated depreciation for 2014 that Mike could deduct using the MACRS Tables.

Reference no: EM13750018

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