Mike purchases a heavy duty truck (5 year class recovery property) for his delivery service on April 30, 2012. The truck is not considered a passenger automobile for purposes 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 no election to expense is made and no bonus depreciation is taken.<?xml:namespace prefix = o ns = “urn:schemas microsoft com:office:office” />
a. Calculate the amount of depreciation for 2012 using financial accounting straight line depreciation (not the straight line MACRS election) over the truck’s estimated useful life.
b. Calculate the amount of depreciation for 2012 using the straight line depreciation election, using MACRS tables over the minimum number of years.
c. Calculate the amount of accelerated depreciation for 2012 that Mike could deduct using the MACRS tables.