Business Paper-Depreciation Assignment

PROBLEM 5
A. For the properties listed below compute the depreciation taken during
the useful life of the property. Assume that all property is post-1986
Property and that 15 percent of the cost of residential and commercial properties are assigned to land.
B. Include columns for the applicable AMT depreciation and the
accompanying AMT adjustment. You can follow the example given on the attached spread
sheet.
TIP: The AMT adjustment for personal property is the difference between
the DEPRECIATION taken under MACRS and the amount determined by using 150%
declining balance (DB) method under ADS. The AMT adjustment for real property is
the difference between the DEPRECIATION taken under MACRS and the amount
determined by using strait line (SL) method under ADS.
PROPERTY	COST	PLACED IN SERVICE
Tractor unit	6,700	15 Feb
Race horse over 2 years old	80,000	12 May
Computer	2,950	25 Nov
Luxury Automobile	120,000	15 May 1998
General Purpose Truck	46,000	13 Oct
Office Desk	2,900	5 Jan
Office Safe	2,200	7 Sept
Light Boat	98,000	27 July
Petroleum Refining Installation	342,000	15 June
Residential Rental Building	13,000,000	26 April
Nonresidential Rental Building	10,000,000	20 Nov

 

 

 

Note: These are the suggested columns. Make sure that all the columns fit on one page

 

Asset Description

 

Class Life

 

Date Placed in Service

 

Cost Basis

 

Class Life

 

Recovery Rate

 

MACRS Accumulated Depreciation

 

Adjusted Basis

 

AMT Rate

 

AMT Recovery Amount

 

AMT Accumulated Depreciation

 

AMT Adjustment

 

AMT Adjusted Basis