Question

A piece of equipment (Asset class 15.0) was purchased bythe Jones Construction Company. The cost basis was $300,000. Determinethe ADS and GDS depreciation deductionfor this property each year

Answer 1

Alternative depreciation system (ADS depreciation) per year:

Year % depreciation expense

1 8.32% $24,960

2 16.67% $50,010

3 16.67% $50,010

4 16.67% $50,010

5 16.67% $50,010

6 16.67% $50,010

7 8.33% $24,990

General depreciation system (GDS depreciation) or MACRS per year:

Year % depreciation expense

1 20% $60,000

2 32% $96,000

3 19.20% $57,600

4 11.52% $34,560

5 11.52% $34,560

6 5.76% $17,280