ABC Corp bought a production machine on January 1, 2016 for $31,250.The company did not elect Section 179 expensing and elected out of claiming bonus depreciation in 2016, and is depreciating the machine using the MACRS accelerated depreciation tables for 5-year property.What is the 2018 depreciation (Year 3)deduction for the machine?

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Quizplus · Accepted Answer

The MACRS depreciation rates for 5-year property are:Year 1: 20%Year 2: 32%Year 3: 19.2%Year 4: 11.52%Year 5: 11.52%The depreciation deduction for 2018 (Year 3) is $31,250 x 19.2% = $6,000.

ABC Corp Bought a Production Machine on January 1, 2016