You own some equipment that you purchased four years ago at a cost of $287,000.

Question

You own some equipment that you purchased four years ago at a cost of $287,000. The equipment is five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for years 1 to 6, respectively. You are considering selling the equipment today for $99,000. Which one of the following statements is correct if your tax rate is 35 percent?

You own some equipment that you purchased four years ago at a cost of $287,000. The equipment is five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for years 1 to 6, respectively. You are considering selling the equipment today for $99,000. Which one of the following statements is correct if your tax rate is 35 percent?

Explanation / Answer

Answer No. The Accumulated depreciation to date is $270468.80

Calcualtion of Depreciation Based on MACRS Year Purchase cost Rate Depreciation Charge Accumulated Depreciation Book Value 1 287000 0.2 57400          57,400.00 229600 2 287000 0.32 91840        149,240.00 137760 3 287000 0.192 55104        204,344.00 82656 4 287000 0.1152 33062.4        237,406.40 49593.6 5 287000 0.1152 33062.4        270,468.80 16531.2

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