Looking for step by step instructions on how to calculate this answer please. Ac

Question

Looking for step by step instructions on how to calculate this answer please.

Acorn Construction (calendar year-end C-corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has record income and would like to maximize its cost recovery deduction for the current year. (Use MACRS Table 2,)

What is Acorn’s maximum cost recovery deduction in the current year assuming that bonus depreciation and 2014 §179 limits are extended to 2015?

Asset Placed in Service Basis   New equipment and tools     August 20 $ 800,000   Used light duty trucks     October 17 1,200,000   Used machinery     November 6 525,000   Total $ 2,525,000

Explanation / Answer

property placed in service in last half year, i.e. 3 quarter,

MCARS depreciation rate in 1st year = 15% ( 5 year ), 10.71 % (7 year)

Asset   Placed in Service   Basis depreciation

New equipment and tools    August 20 800,000 800000 * 10.71 * 224/365 = 52582

Used light duty trucks   October 17 1,200,000 1200000 * 15% * 166/365 = 81863

Used machinery   November 6 525,000 525000 * 15% * 146/365 = 31500

Acorn’s maximum cost recovery deduction in the current year = 165945

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