Vanessa owns a consulting business that has always been reported as a sole proprietorship on her tax return. Assume that on February 19, 2016 Vanessa purchases a new computer for $5,000 that will be used solely for her business. Using the depreciation table below compute her depreciation expense for 2016. Assume no bonus depreciation and no Section 179 depreciation.
Cost of asset
Depreciation % from Table
Months deemed owned in 2016
Regular MACRS Depreciation for 2016
Assume that Vanessa sells this computer on August 3, 2018. What would MACRS depreciation be for the computer for 2018?
MACRS Accelerated Depreciation Table
Recovery Year Property Class
3-year 5-year 7-year
1 33.33% 20.00% 14.29%
2 44.45 32.00 24.49
3 14.81 19.20 17.49
4 7.41 11.52 12.49
5 11.52 8.93
6 5.76 8.92
Cola, Inc. purchased all of its personalty (equipment) in the fourth quarter of its tax year. Provide the IRC Section and subsection that indicates the convention that applies when computing MACRS depreciation in this situation.
Enter your response in the answer fields below. Guidance on correctly structuring your response appears above and below the answer fields.
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Examples of correctly formatted IRC responses are IRC§1(a),IRC§12(a),IRC§12A(a),IRC§12AA(a),IRC§123(a),
IRC§123A(a),IRC§1234(a),IRC§1234A(a), and IRC§1234A-5(a)
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Vanessa XXXX a XXXXXXXXXX business XXXX XXX always XXXX XXXXXXXX as a sole proprietorship XX her tax return. XXXXXX XXXX XX February 19, 2016 XXXXXXX purchases X new XXXXXXXX XXX $5,000 XXXX will XX XXXX solely for XXX XXXXXXXXX Using XXX depreciation table below XXXXXXX her depreciation expense f
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