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A B C D E F G H I J
PROBLEM 8.56
a MACRS-GDS(39)
b
d1=$15,996.50 B1=$634,003.50
d4=$16,666.00 B4=$584,005.50
d7=$16,666.00 B7=$534,007.50
BASIS $650,000.00
EST SALV $0.00 USEFUL LIFE 40
RCVD SALV $0.00 PERIODS 40
EOY
dtBtMACRS-GDS(39)
0 $650,000.00
1 $15,996.50 $634,003.50 2.461%
2 $16,666.00 $617,337.50 2.564%
3 $16,666.00 $600,671.50 2.564%
4 $16,666.00 $584,005.50 2.564%
5 $16,666.00 $567,339.50 2.564%
6 $16,666.00 $550,673.50 2.564%
7 $16,666.00 $534,007.50 2.564%
8-39 $16,666.00 $517,341.50 2.564%
40 $695.50 $516,646.00 0.107%
c
d1=$15,996.50 B1=$634,003.50
d4=$16,666.00 B4=$584,005.50
d7=$9,027.42 B7=$541,646.08
BASIS $650,000.00
EST SALV $0.00 USEFUL LIFE 40
RCVD SALV $0.00 PERIODS 40
EOY
dtBtMACRS-GDS(39)
0 $650,000.00
1 $15,996.50 $634,003.50 2.461%
2 $16,666.00 $617,337.50 2.564%
3 $16,666.00 $600,671.50 2.564%
4 $16,666.00 $584,005.50 2.564%
5 $16,666.00 $567,339.50 2.564%
6 $16,666.00 $550,673.50 2.564%
7 $9,027.42 $541,646.08 1.389%
d NORMALLY, BUILDING OWNERS (E.G., DOCTORS) WILL TURN (SELL) A PROPERTY AFTER A FEW YEARS, SEEKING NEWER ACCOMODATIONS.
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dtBt
A B C D E
PROBLEM 8.57
a MACRS-GDS
BASIS $850,000.00
EST SALV $0.00 USEFUL LIFE 3
RCVD SALV $0.00 PERIODS 4
MARR 11.00%
EOY
dtBtMACRS-GDS(3)
0$850,000.00
1$283,305.00 $566,695.00 33.33%
BASIS $850,000.00 RATE 66.6667%
EST SALV $0.00 USEFUL LIFE 3
RCVD SALV $0.00 PERIODS 3
MARR 11.00%
EOY
dtBt
c DDB-SL
BASIS $850,000.00 RATE 66.6667%
EST SALV $0.00 USEFUL LIFE 3
RCVD SALV $0.00 PERIODS 3
MARR 11.00%
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A B C D E
SUM DEPR $850,000.00
PW DEPR $732,873.93
d SLN
BASIS $850,000.00
EST SALV $0.00 USEFUL LIFE 3
RCVD SALV $0.00 PERIODS 3
MARR 11.00%
EOY
dtBt
0$850,000.00
1$283,333.33 $566,666.67
2$283,333.33 $283,333.33
3$283,333.33 $0.00
4$0.00 $0.00
SUM DEPR $850,000.00
PW DEPR $692,385.84
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A B C D E F G
MODIFIED ACRS RATES – GDS
MACRS CL 3-YR 5-YR 7-YR 10-YR 15-YR 20-YR
ADR <=4 >4 to <10 >=10 to <16 .=16 to <20 >=20 to <25 >=25
%200% 200% 200% 200% 150% 150%
133.33% 20.00% 14.29% 10.00% 5.00% 3.750%
244.45% 32.00% 24.49% 18.00% 9.50% 7.219%
314.81% 19.20% 17.49% 14.40% 8.55% 6.677%
47.41% 11.52% 12.49% 11.52% 7.70% 6.177%
511.52% 8.93% 9.22% 6.93% 5.713%
65.76% 8.92% 7.37% 6.23% 5.285%
78.93% 6.55% 5.90% 4.888%
84.46% 6.55% 5.90% 4.522%
96.56% 5.91% 4.462%
10 6.55% 5.90% 4.461%
11 3.28% 5.91% 4.462%
12 5.90% 4.461%
13 5.91% 4.462%
14 5.90% 4.461%
20 4.461%
21 2.231%
SUM 100.00% 100.00% 100.00% 100.00% 100.00% 100.000%
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A B C D E
BASIS $500,000.00
EST SALV $50,000.00 USEFUL LIFE 10
RCVD SALV $50,000.00 PERIODS 10
EOY
dtBt
0$500,000.00
1$45,000.00 $455,000.00
2$45,000.00 $410,000.00
3$45,000.00 $365,000.00
4$45,000.00 $320,000.00
5$45,000.00 $275,000.00
6$45,000.00 $230,000.00
7$45,000.00 $185,000.00
8$45,000.00 $140,000.00
9$45,000.00 $95,000.00
10 $45,000.00 $50,000.00
SUM DEPR $450,000.00
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A B C D E F
BASIS $500,000.00 RATE 20.5672%
EST SALV $50,000.00 USEFUL LIFE 10
RCVD SALV $50,000.00 PERIODS 10
EOY
dtBtdtBt
EXC FUNC EXC FUNC CALC CALC
0$500,000.00 $500,000.00
1$103,000.00 $397,000.00 $102,835.88 $397,164.12
2$81,782.00 $315,218.00 $81,685.45 $315,478.67
3$64,934.91 $250,283.09 $64,885.06 $250,593.62
4$51,558.32 $198,724.78 $51,540.03 $199,053.59
5$40,937.30 $157,787.47 $40,939.70 $158,113.88
6$32,504.22 $125,283.25 $32,519.56 $125,594.32
7$25,808.35 $99,474.90 $25,831.21 $99,763.12
8$20,491.83 $78,983.07 $20,518.46 $79,244.66
9$16,270.51 $62,712.56 $16,298.39 $62,946.27
10 $12,918.79 $49,793.77 $12,946.27 $50,000.00
SUM DEPR $450,206.23 SUM DEPR $450,000.00
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A B C D E F
BASIS $500,000.00 RATE 20.0000%
EST SALV $50,000.00 USEFUL LIFE 10
RCVD SALV $50,000.00 PERIODS 10
EOY
dtBtdtBt
EXC FUNC EXC FUNC CALC CALC
0$500,000.00 $500,000.00
1$100,000.00 $400,000.00 $100,000.00 $400,000.00
2$80,000.00 $320,000.00 $80,000.00 $320,000.00
3$64,000.00 $256,000.00 $64,000.00 $256,000.00
4$51,200.00 $204,800.00 $51,200.00 $204,800.00
5$40,960.00 $163,840.00 $40,960.00 $163,840.00
6$32,768.00 $131,072.00 $32,768.00 $131,072.00
7$26,214.40 $104,857.60 $26,214.40 $104,857.60
8$20,971.52 $83,886.08 $20,971.52 $83,886.08
9$16,777.22 $67,108.86 $16,777.22 $67,108.86
10 $13,421.77 $53,687.09 $13,421.77 $53,687.09
SUM DEPR $446,312.91 SUM DEPR $446,312.91
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A B C D E F G
BASIS $500,000.00 RATE 20.0000%
EST SALV $50,000.00 USEFUL LIFE 10
RCVD SALV $50,000.00 PERIODS 10
EOY
dtdtdtdtBt
EXC FUNC CALC SLN DDB-SLN DDB-SLN
0$500,000.00
1$100,000.00 $100,000.00 $45,000.00 $100,000.00 $400,000.00
2$80,000.00 $80,000.00 $38,888.89 $80,000.00 $320,000.00
3$64,000.00 $64,000.00 $33,750.00 $64,000.00 $256,000.00
4$51,200.00 $51,200.00 $29,428.57 $51,200.00 $204,800.00
5$40,960.00 $40,960.00 $25,800.00 $40,960.00 $163,840.00
6$32,768.00 $32,768.00 $22,768.00 $32,768.00 $131,072.00
7$26,214.40 $26,214.40 $20,268.00 $26,214.40 $104,857.60
8$20,971.52 $20,971.52 $18,285.87 $20,971.52 $83,886.08
9$16,777.22 $16,777.22 $16,943.04 $16,943.04 $66,943.04
10 $13,421.77 $13,421.77 $16,943.04 $16,943.04 $50,000.00
SUM DEPR $450,000.00
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A B C D E
BASIS $500,000.00 RATE 20.0000%
EST SALV $50,000.00 USEFUL LIFE 10
RCVD SALV $50,000.00 PERIODS 10
EOY
dtBt
EXC FUNC EXC FUNC
0$500,000.00
1$100,000.00 $400,000.00
2$80,000.00 $320,000.00
3$64,000.00 $256,000.00
4$51,200.00 $204,800.00
5$40,960.00 $163,840.00
6$32,768.00 $131,072.00
7$26,214.40 $104,857.60
8$20,971.52 $83,886.08
9$16,943.04 $66,943.04
10 $16,943.04 $50,000.00
SUM DEPR $450,000.00
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A B C D E
BASIS $500,000.00
EST SALV $50,000.00 USEFUL LIFE 8
RCVD SALV $50,000.00 PERIODS 8
EOY dt Bt MACRS-GDS
0$500,000.00
1$71,450.00 $428,550.00 14.29%
2$122,450.00 $306,100.00 24.49%
3$87,450.00 $218,650.00 17.49%
4$62,450.00 $156,200.00 12.49%
5$44,650.00 $111,550.00 8.93%
6$44,600.00 $66,950.00 8.92%
7$44,650.00 $22,300.00 8.93%
8$22,300.00 $0.00 4.46%
9$0.00 $0.00
10 $0.00 $0.00
SUM DEPR $500,000.00
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A B C D E
BASIS $500,000.00
EST SALV $50,000.00 USEFUL LIFE 8
RCVD SALV $50,000.00 PERIODS 8
EOY dt Bt MACRS-ADS
0$500,000.00
1$31,250.00 $468,750.00 6.25%
2$62,500.00 $406,250.00 12.50%
3$62,500.00 $343,750.00 12.50%
4$62,500.00 $281,250.00 12.50%
5$62,500.00 $218,750.00 12.50%
6$62,500.00 $156,250.00 12.50%
7$62,500.00 $93,750.00 12.50%
8$62,500.00 $31,250.00 12.50%
9$31,250.00 $0.00 6.25%
10 $0.00 $0.00
SUM DEPR $500,000.00 SUM % 100.00%
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dtBt
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A B C D E
dtBtMACRS-GDS(5)
MACRS-GDS
BASIS $300,000.00
EST SALV $0.00 USEFUL LIFE 5
RCVD SALV $0.00 PERIODS 6
MARR 10.00%
6$17,280.00 $0.00 5.76%
SUM DEPR $300,000.00
PW DEPR $231,978.13
200% DBH
2$96,000.00 $144,000.00
3$57,600.00 $86,400.00
4$34,560.00 $51,840.00
5$20,736.00 $31,104.00
6$7,776.00 $23,328.00
EOY
dtBt
1$120,000.00 $180,000.00
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dtBt
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A B C D E
2$72,000.00 $108,000.00
3$43,200.00 $64,800.00
4$25,920.00 $38,880.00
5$15,552.00 $23,328.00
6$0.00 $23,328.00
BASIS $300,000.00 RATE 40.0000%
EST SALV $0.00 USEFUL LIFE 5
RCVD SALV $0.00 PERIODS 5
MARR 10.00%
EOY
dtBt
SUM DEPR $300,000.00
PW DEPR $243,299.33
SLN
BASIS $300,000.00
EST SALV $0.00 USEFUL LIFE 5
4$60,000.00 $60,000.00
5$60,000.00 $0.00
6$0.00 $0.00
SUM DEPR $300,000.00
PW DEPR $227,447.21
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A B C D E
RCVD SALV $0.00 PERIODS 6
MARR 10.00%
EOY
dtBt
0$300,000.00
1$30,000.00 $270,000.00
2$60,000.00 $210,000.00
3$60,000.00 $150,000.00
4$60,000.00 $90,000.00
5$60,000.00 $30,000.00
6$30,000.00 $0.00
SUM DEPR $300,000.00
PW DEPR $217,108.70
SYD
BASIS $300,000.00 SYD 15
EST SALV $0.00 USEFUL LIFE 5
RCVD SALV $0.00 PERIODS 5
MARR 10.00%
EOY
dtBt
EXC FUNC EXC FUNC
0$300,000.00
1$100,000.00 $200,000.00
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A B C D E F G H I J K L
ORIG BASIS $350,000.00 INCOME/UNIT $50.00 FIXED COST $12.50
EST SALV $0.00 USEFUL LIFE 48000 VAR COST $7.50
RCVD SALV $0.00 PERIODS 6 PERCENT DEPL 15.00%
EOY UNITS SOLD GROSS INC OPERATING TAXABLE INC 50% OF TI PERCENTAGE COST DEPLETION ADJ COST UNITS
COST BEFORE DEPL BEFORE DEPL DEPLETION (15%) DEPLETION USED BASIS REMAINING
0 -$350,000.00 -$350,000.00 $350,000.00 48,000
115000 $750,000.00 $187,500.00 $562,500.00 $281,250.00 $112,500.00 $109,375.00 $112,500.00 $237,500.00 33,000
213000 $650,000.00 $260,000.00 $390,000.00 $195,000.00 $97,500.00 $93,560.61 $97,500.00 $140,000.00 20,000
310000 $500,000.00 $275,000.00 $225,000.00 $112,500.00 $75,000.00 $70,000.00 $75,000.00 $65,000.00 10,000
46000 $300,000.00 $210,000.00 $90,000.00 $45,000.00 $45,000.00 $39,000.00 $45,000.00 $20,000.00 4,000
53000 $150,000.00 $127,500.00 $22,500.00 $11,250.00 $11,250.00 $15,000.00 $15,000.00 $5,000.00 1,000
61000 $50,000.00 $50,000.00 $0.00 $0.00 $0.00 $5,000.00 $5,000.00 $0.00 0