Problem:
Mike purchased a heavy-duty truck (five yearclass recovery property) for his delivery service on April 30,2014. The truck is not considered a passenger automobile forpurposes of the listed property and luxury automobile limitations.The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Assume half-year convention for tax and no election to expense is made.
Required:
Question 1: Calculate the amount of depreciation for 2014 using financial accounting (not the straight-line MACRS election) straight-line depreciation over the truck's estimated useful life.
Question 2: Calculate the amount of depreciation for 2014 using the straight-line depreciation election under MACRS tables over the minimum number of years.
Question 3: Calculate the amount of accelerated depreciation for 2014 that Mike could deduct using the MACRS Tables.
Note: Explain all steps comprehensively.