Determine the MACRS Cost Recovery Deductions for 2013 and 2014

question 111

Essay

Determine the MACRS cost recovery deductions for 2013 and 2014 on the following assets that were purchased for use in a farming business on July 15,2013.The taxpayer does not wish to use the Section 179 election and elects out of bonus depreciation..
$\begin{array}{lr}\text { Assets } & \text { Cost } \\\text { Breeding hogs } & \$ 20,000 \\\text { Daity cattle } & 20,000 \\\text { Tractor } & 20,000\end{array}$
a.Breeding hogs depreciation:Total 2013 Breeding hogs Cost Recovery Deduction (show your calculations)Total 2014 Breeding hogs Cost Recovery Deduction (show your calculations)
b.Dairy cattle depreciation:Total 2013 Dairy Cattle Cost Recovery Deduction (show your calculations)Total 2014 Dairy Cattle Cost Recovery Deduction (show your calculations)
c.Tractor depreciation:Total 2013 Tractor Cost Recovery Deduction (show your calculations)Total 2014 Tractor Cost Recovery Deduction (show your calculations)
d.Assume the Breeding hogs are sold for $25,000 on February 1, 2015. Determine the adjusted basis of the hogs as of the sale date and the realized gain (loss) on the sale. Show your calculations.Adjusted basis__________Realized gain (loss)__________

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