Question

Way Corporation disposed of the following tangible personal property assets in the current year.

	Date	Date		Original
Asset	Acquired	Sold	Convention	Basis
Furniture (7-year)	5/12/15	7/15/19	HY	$	87,500
Machinery (7-year)	3/23/16	3/15/19	MQ		104,500
Delivery truck* (5-year)	9/17/17	3/13/19	HY		46,000
Machinery (7-year)	10/11/18	8/11/19	MQ		303,800
Computer (5-year)	10/11/19	12/15/19	HY		106,000

*Used 100 percent for business.

Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2019 depreciation deduction (ignore §179 expense and bonus depreciation for this problem). (Use MACRS Table 1, Table 2, and Exhibit 10-6.)

Answer 1

Asset	Basis	Convention	MACRS %	Full year Depreciation allowed	Depreciation
	1	2	3	4	1*3*4
Furniture	$        87,500	HY	8.93%	50%	$        3,907
Machinery	$      104,500	MQ	10.93%	12.50%	$        1,428
				Disposed in 1st quarter
Delivery truck	$      303,800	HY	19.20%	50%	$      29,165
Machinery	$      303,000	MQ	27.55%	62.50%	$      52,173
				Disposed in 3rd quarter
Computer	$      106,000	HY	0%*	50%
Total					$      86,672
*No depreciation is allowed for asset acquired and sold in the same year