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What is depreciation?

IRS Publication 946, How To Depreciate Property, explains it this way:

Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance for the wear and tear, deterioration, or obsolescence of the property.

In other words, it is the method by which a business can expense part of the cost of an asset each year over the asset's recovery period.

What is MACRS depreciation?

MACRS or Modified Accelerated Cost Recovery System is, in my opinion, a needlessly complicated system, designed by Congress and implemented by the IRS, for depreciating the cost of assets. MACRS replaced ACRS (Accelerated Cost Recovery System) in 1986.

This MACRS Depreciation Calculator supports nearly all the nuances and conventions of the Internal Revenue Code. It includes support for qualified and listed assets including motor vehicles. While the calculator is capable of depreciating nearly any asset, if you want to use it correctly, you'll need to familiarize yourself with Publication 946 (linked above).

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With all other calculators on this site, I attempt to provide detailed instructions for their use. That is impossible when it comes to using the MACRS Depreciation Calculator. As mentioned, the writers of the IRC (Internal Revenue Code) have made the subject of depreciation needlessly complicated. While depreciation arithmetic is rather simple — it can be explained in about half a page, the rules governing depreciation cover nearly 100 pages (spread across multiple publications). Please confirm your understanding (and mine!) of how to apply depreciation rules with an income tax professional before filing a tax return.

Though I have been studying depreciation since before there was MACRS (1986), I am most certainly NOT an income tax professional.

Nonetheless, below is some general guidance on the calculator's use. Much of it comes directly from IRS Publication 946.


A special note about automobile depreciation. In February 2019, the IRS published a revenue procedure that "provides a safe harbor method of accounting for determining depreciation deductions for passenger automobiles." I point this out, because there is no mention of the safe harbor details in Publication 946 (as of the edition published in early 2020 "for use in preparing 2020 returns"). Applying the safe harbor rules results in significantly different depreciation deductions. As of April 13, 2020, this calculator now supports the safe harbor depreciation procedure. A special thank you goes out to Robert Valentine, CPA, for pointing this out to me. Robert publishes a depreciation calculator for Windows. (I've not used it.)

What Property Can Be Depreciated?

IRS Pub. 946 p.4:

You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. You also can depreciate certain intangible property, such as patents, copyrights, and computer software.
  • It must be property you own.
  • It must be used in your business or income-producing activity.
  • It must have a determinable useful life.
  • It must be expected to last more than one year.

Options, settings, and inputs explained

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Basis - The basis is frequently the cost of the asset. Frequently, but not always. The basis for real estate is always different than the contract purchase price. If you are depreciating property, you must deduct the value of the land. But, you also add to the basis your settlement costs. For example (Pub. 946 p 12):

  • Legal and recording fees.
  • Abstract fees.
  • Survey charges.
  • Owner's title insurance.
  • Amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for

Business Use - If the asset is not used entirely for business, enter the percentage that is for business use. If you enter $100,000 for basis and business use is 80%, then the basis for depreciation (adjusted basis) is $80,000. (The calculator makes this calculation of course.)

Asset Being Depreciated - This has no impact on the calculation. It is included here so that when you print a schedule, it will include the identity of the asset.

Placed Into Service - The date when the asset is available for use. You should note that the business does not have to be using the asset. As long as it is available, the asset is in service.

179 Deduction - The basis is lowered by any 179 deduction that you take.

IRS Pub. 946 p.2:

What’s New for 2019

Section 179 deduction dollar limits. The maximum amount you can deduct for most section 179 property you placed in service in tax years beginning in 2019 is $1,020,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,550,000.Also, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2019 is $25,500.

IRS Pub. 946 p.15:

You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. This is the section 179 deduction. You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions.

Class Life / Recovery Period -

IRS Pub. 946 p.32:

The recovery period of property is the number of years over which you recover its cost or other basis. It is determined based on the depreciation system (GDS or ADS) used.

The recovery periods available is determined by the depreciation method selected. The calculator automatically limits the choice of recovery periods to the ones that are appropriate for the method selected.

In general, recovery periods are longer under ADS than they are under GDS.

Depreciation Method - Currently, the taxpayer may select from one of four depreciation methods. Three methods fall under GDS and one under ADS. Two GDS methods use a declining balance equation that has the effect of accelerating the tax benefit.

IRS Pub. 946 pp.27 - 28

The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS).

Which Depreciation System (GDS or ADS) Applies?

Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS.

IRS Convention - The three conventions establish when the recovery period begins and ends.

IRS Pub. 946 p.34

The mid-month convention: Under this convention, you treat all property placed in service or disposed of during a month as placed in service or disposed of at the midpoint of the month. This means that a one-half month of depreciation is allowed for the month the property is placed in service or disposed of.
The mid-quarter convention: Under this convention, you treat all property placed in service or disposed of during any quarter of the tax year as placed in service or disposed of at the midpoint of that quarter. This means that one and one-half months of depreciation is allowed for the quarter the property is placed in service or disposed of.
The half-year convention: Under this convention, you treat all property placed in service or disposed of during a tax year as placed in service or disposed of at the midpoint of the year. This means that a one-half year of depreciation is allowed for the year the property is placed in service or disposed of.

Special Allowance - calculated. "Qualified Asset" must be set to "Yes" (see below).

IRS Pub. 946 p.23

You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. The allowance applies only for the first year you place the property in service. The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service.

Qualified Asset - if your asset is a qualified asset, select the special allowance including the new 100% bonus depreciation.

Your property is qualified property if it is one of the following:

  • Qualified reuse and recycling property. 50% special allowance.
  • Qualified second generation biofuel plant property. 50% special allowance.
  • Certain qualified property acquired before September 28, 2017. 30% special allowance, unless it is certain property with a "long production period" or "certain aircraft," then you can take a 40% special depreciation allowance.
  • Certain qualified property acquired after September 27, 2017. 100% special allowance.
  • Certain plants bearing fruits and nuts. 100% special allowance.

Is Asset a Vehicle? - when "Yes", it activates the many rules pertaining to vehicle depreciation, including maximum depreciation deductions.

Type of Vehicle - The vehicle type impacts the amount of the maxiumum depreciation that a taxpayer can deduct each year prior to 2018. After 2017, the maximum depreciation amount is the same for all vehicles. In 2019, the IRS issued a safe harbor ruling for vehicles. If you selects qualified asset 100% bonus depreciation then you should probably select safe harbor rules. But be careful. There are exceptions. For example, you can't select 100% bonus depreciation and have a 179 expense deduction too.

Listed Asset -

IRS Pub. 946 p.53

Listed property is any of the following:

  • Passenger automobiles (as defined later).
  • Any other property used for transportation, unless it is an excepted vehicle.
  • Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment).

Note: The calculator will not create an accurate schedule that incorporates a short tax year.

IRS Pub. 946 p.45

A short tax year is any tax year with less than 12 full months. This section discusses the rules for determining the depreciation deduction for property you place in service or dispose of in a short tax year. It also discusses the rules for determining depreciation when you have a short tax year during the recovery period (other than the year the property is placed in service or disposed of).
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43 Comments on “Macrs Depreciation Calculator”

financial online calculator Join the conversation. Tell me what you think.
  • MONICA WILLIAMS says:

    First, I am glad I found this site. It seems you are very helpful. My problem is I LITERALLY DO NOT UNDERSTAND ANY OF THIS. I have a take home test and I cannot understand to what I am doing or the §179, etc. This is a take home test for a class I have in college (just to become familiar with taxation). How do I calculate:
    On July 2, 2018 purchased a commercial building $600,000 and purchased a residential building Jun 15, 2018 $400,000. What is total depreciation for both buildings in 20198 and 2019 using the MACRS.

    • What part don’t you understand? Did you read the text on this page?

      As to finding the total. I would approach it by calculating the depreciation for each building and then adding them together. But I would be careful. Only because normally, residential buildings are not depreciated. So that part might be a trick. 🙂

  • if i brought a house in California en 2017 for 120.000. with S/L method how much I can depreciate annually. in my taxes 2018

    • I don’t answer tax questions. It’s not appropriate. For one thing, in the US, often tax questions can’t be answered in isolation. Meaning, the answer depends on other variables. (I assume, the house isn’t your primary residence and that it’s an income producing property? If it isn’t, then you most likely can’t depreciate it.)

    • You’re welcome. My intention is to show all the years. If you click calc with the calculator’s defaults, the basis is $1,000 and the accumulated depreciation is $1,000. There’s nothing left to show.

      You must have found a bug. Can you tell me what your inputs were that you were using?

      • Sorry should have been more specific… as an example, I acquired a property in may 2015. I depreciated it according to your MCARS calculator in ’15, ’16, ’17. In 2018 however I sold the property however in May 2018. In this case, using the mid-month convention, I can (for 2018) depreciate (I believe!) 5.5/12 of a normal full year depreciation (May being month 5 + half month 0.5 = 5.5/12). It’s a simple calculation, but I just thought you may want to include it in your calculator. Rgds.

        • I see your point. I’ll certainly try to add a sold date with next update (hopefully this year). Thanks for the suggestion.

  • Hi there. I’m trying to calculate a Vehicle, however I get an error.

    Not a valid “Placed into Service Date” for vehicles. Supports years 2005-2016.

    The vehicle in question is a work truck 2019.
    The other vehicle is a forklift 2018.

    • Thank you Kimberly for bringing this to my attention. I’ll take a look and try to get it fixed in the next week. Sorry for the delay.

    • I updated the MACRS depreciation calculator with the maximum depreciation amounts for vehicles. So you won’t get the error about not supporting years after 2016.

  • I have a single family residential rental property I rented out for 214 days in 2019. My cost basis purchase price plus improvements to rent is $406,983. Can I use that gross amount to depreciate or do I need to deduct land value according to tax bill of $33,236? This rental property supplements my social security income; my gross income will be less than $45,000. Tax preparers want $450 to $700 to prepare my tax return. Your input would be greatly appreciated.

    • While you may appreciate my input, it is most likely to be wrong, and therefore, it could cost you a lot more than $450 or $700 in penalties and interest!

      Sorry, but I’m not qualified to answer such tax questions.

  • Question, what if business use % is different each year?

    2017 First Year was 53%as I just started drumming up business and
    2018 was 78% and 2019 was 80%.

    • Rick, sorry, but I don’t know. I never researched this possibility. As you can see, the calculator is not designed to handle such a scenario.

  • $80,000 vehicle, listed 20% business use.
    No section 179 or bonus depreciation
    Should be ADS SL but keep getting a warning I should use SL depreciation. GDS SL tells me to use ADS.

    thanks

    • Dan, I fixed the issue so that ADS SL now works with vehicles.

      I did some testing using your example, and I was surprised that it hits the IRS maximum depreciation amounts (when adjusted by business used percentage) allowed for vehicles in year 3. I mention this because the depreciation results will not appear to be using a straight-line method.

      If you do not see the change right away, you may have to perform a hard refresh of the page:

      Depending on your operating system all you need to do is the following key combination:

      • Windows: ctrl + F5
      • Mac/Apple: Apple + R or command + R
      • Linux: F5

      Above, from Refresh Your Cache.

  • Bob Valentine says:

    Hi Karl,
    The 2019 maximum depreciation amounts for Luxury Autos is:
    Year 1: $18.100
    Year 2: $16,100
    Year 3: $9,700
    Year 4+: $5,760
    I suggest that you update your calculator for 2019. Currently, it is only correct through 2018.

    • Thanks for reminding me, Bob. I checked in early February and Publication 946 was not available. Then I forgot about it. I should have it updated by the weekend. I need to fix a problem when the business use of a vehicle is less than 50%.

    • Hi Bob, I have updated the maximums for 2019 TY. Thank you for reminding me. (I see that I did have a comment on the page about the maximums being for 2018.)

      If you do not see the change right away, you may have to perform a hard refresh of the page:

      Depending on your operating system all you need to do is the following key combination:

      • Windows: ctrl + F5
      • Mac/Apple: Apple + R or command + R
      • Linux: F5

      Above, from Refresh Your Cache.

      • Robert Valentine says:

        The problem is that the calculator is not reducing the cost basis by the amount of the Special Allowance before calculating depreciation in the year 2020 in the example in my prior post above.

        • Thank you for this. You are absolutely right (but only when the calculator is set to vehicle and qualified asset).

          The calculator now adjusts the basis by the special allowance, however, unfortunately, I do not get the same results you get. Either there is something else wrong in my calculation, which I would think would have been detected by other users (and my tests have matched Pub. 946) or you have an error. Since your depreciation numbers are lower than mine, I was wondering if you were adjusting the first year by both the special allowance and the depreciation that would have been deducted had there been no depreciation?

          I’ll test mine some more (the problem I have, is I do not see an example in the IRS publication for an auto with special allowance and the SA being over the maximum allowed), but I figured I may as well post the code change, since the SA did need to be deducted.

  • Robert Valentine says:

    Karl,
    I think something is wrong with the calculation of depreciation for Autos acquired in 2019. I have entered the following data:
    Cost: $40,000
    Business Use: 100%
    Placed In Service: 03/11/2019
    Class Life: 5
    Depreciation Method: GDS 200% DB
    IRS Convention: Half-Year
    Qualified Asset: Yes
    Is Asset a Vehicle: Yes
    Listed Asset: Yes
    Type of Vehicle: Automobile
    Indian Reservation Property: No

    The Schedule SHOULD give the following resluts:
    Special Allowance $18,100
    2020: $7,008
    2021: $4,205
    2022: $2,523
    2023: $2,523
    2024: $1,261
    2025: $4,380

    However, your calculator gives the following results:
    Special Allowance $18,100
    2020: $16,000
    2021: $9,600
    2022: $5,760
    2023: $5,760
    2024: $2880
    2025: $0

    As you can see, your calculator would depreciation the asset $40,000 plus the special allowance of $18,100. And I did the Ctrl+F5 to refresh the page.

  • Bob Valentine says:

    Karl,
    In 2019 the Special Allowance (Bonus Depreciation) is 100%; therefore, the full $18,100 in the first year is considered to be Bonus Depreciation and reduces the depreciation basis for calculating depreciation in the succeeding years. So, for year number 2, assuming the same facts as I spelled out in my comment dated April 8, 2020, the calculation of depreciation would be ($40,000 – $18,100) x .32 = $7,008. And year number 3 would be ($40,000 – $18,100) X .192 = $4,205, and so on. Since these numbers are less than the maximum depreciation allowed each year for a luxury auto, the lower calculated amounts are used.

    • Hi Bob,

      The difference in year two due to the multiplier. Further, we seem to be using different techniques.

      For 5 year property, 200DB, half-year convention, I’m using 0.4 as the multiplier. From Publication 946, page 41:

      Declining balance rate. You figure your declining balance rate by dividing the specified declining balance percentage (150% or 200% changed to a decimal) by the number of years in the property’s recovery period. For example, for 3-year property depreciated using the 200% declining balance method, divide 2.00 (200%) by 3 to get 0.6667, or a 66.67% declining balance rate

      Or 2.0 / 5 = 0.4 multiplier.

      There happens to be an example using the same parameters, see page 42:

      Second year. You reduce the adjusted basis ($1,000) by the depreciation claimed in the first year ($200). You multiply the result ($800) by the DB rate (40%). Depreciation for the second year under the 200% DB method is $320.

      For a vanilla 200DB 5-year, half-year convention, using these facts from the above-sited example, the calculated results match.

      Cost: $1,000
      Business Use: 100%
      Placed In Service: 02/15/2019
      Class Life: 5
      Depreciation Method: GDS 200% DB
      IRS Convention: Half-Year
      Qualified Asset: No
      Is Asset a Vehicle: No
      Listed Asset: No
      Type of Vehicle: –
      Indian Reservation Property: No

      2019:200.00
      2020:320.00
      2021:192.00
      2022:115.20
      2023:115.20
      2024:57.60

      This calculator follows (my interpretation) of the steps starting on p. 40 under "Figuring the Deduction Without Using the Tables."

      Now that the calculator is fixed to adjust the basis by the special allowance when the user selects a vehicle, I don’t see an issue with the results.

      I am certainly willing to reconsider if you disagree.

  • Robert Valentine says:

    Karl,

    Your example that depreciates personal property of $1,000 is correct.

    However, depreciating luxury automobiles is quite different and complex. And to understand it fully one needs to go beyond Pub 946. In 2019 the bonus depreciation went to 100% and as a result, the IRS issued a Safe Harbor rule that explains how to depreciate autos under this rule. Here is a link that explains the Safe Harbor rule and how to calculate depreciation: https://www.sagecity.com/support_communities/sage_fixed_assets/b/sage_fixed_assets_blog/posts/luxury-auto-light-trucks-and-vans-safe-harbor-rule-changes

    I hope this helps. BTW, I am a CPA and I have studied this topic for many years. I have even written a program that calculates depreciation that I sell to CPA offices and private companies: Cellutionware Software.com

    • Robert Valentine says:

      Additionally, the only thing that the article that I referenced in my prior post is that they used in their examples the 2018 maximum annual depreciation limits, rather that the 2019 increased annual maximum limits. For example, the 2019 first year limit is $18,100, instead of $18,000. Other than that, the article is on point. The article was probably written before the IRS issued notification of the increase to the rates.

      • OMG! Even though I studied the official, 100+ page, IRS publication, I had no chance of getting this right.

        Thank you for this. I’m going to need some time to digest the changes required and to get them implemented.

        (I edited your comment, to change your firm’s URL into a link. I hope you get some traffic, or better yet some sales.)

    • Hi Robert, The calculator now supports the safe harbor method, with one caveat. It does not have the ability to calculate depreciation beyond the specified recovery period – it just stops. So for the example that we have been discussing, you won’t see an entry for 2025 ($4,380). I have to do some re-engineering to get that fixed.

      I’ve also added support for additional qualified property special allowance percentages. And I’ve made appropriate changes to the documentation.

      If you scroll down the page to "A special note about automobile depreciation," you’ll see an honorable mention.

      Once again, thank you for taking the time to point out the calculator’s shortcomings.

      • Robert Valentine says:

        Great job Karl!

        You have been successful at incorporating the Safe Harbor rules with respect to calculating depreciation for luxury autos in 2019 when the bonus rate (special allowance) is 100%.

        I might make one further suggestion: that you also put the bonus depreciation (Special Allowance) in the Depreciation column of the schedule so that it is more easily understood that in the first year that $18,100 (2019 amount) is deductible/expensed.

        In addition, you might make a note that after year 6 the auto will continue to be depreciated each year by an amount not to exceed the maximum allowed (for example $5,760 for assets acquired in 2019).

        • [RV] Great job Karl!

          Thank you. It did manage to kill a substantial amount of a 3-day weekend.

          [RV] put the bonus depreciation (Special Allowance) in the Depreciation column of the schedule

          Good idea. I will do that.

          [RV] In addition, you might make a note that after year 6 the auto will continue to be depreciated each yea

          Yes. That’s what I meant by:

          [KT] with one caveat. It does not have the ability to calculate depreciation beyond the specified recovery period…I have to do some re-engineering to get that fixed.

          Since I assume, you are a programmer too, the challenge is setting up the looping. Currently, I have one loop that is initialized based on the length of the recovery period. Only when the code completes the loop’s execution can it be determined if an asset has been fully depreciated. If it’s not, I need a 2nd calculation. I should refactor the code to do this eloquently. On the to-do list.

    • Yes, you can change the recovery period. When the calculator loads, however, it is set up for an automobile depreciation schedule. Auto requires (per IRS) a 5 year recovery period.

      So, turn off the vehicle option, and then you’ll be able to set a 7-year recovery period.

  • Hi Karl,

    I’m having trouble understanding the way the calculator comes up with the depreciation amount. Here are the follow information:

    Cost basis: $27,000
    Business Use: 100%
    Placed into service: 03/23/2016
    Depreciation Method: GDS 200% DB
    Property Class: 5-year
    IRS Convention: Half-year
    179 Deduction: 0
    Qualified Asset: No
    Special Allowance: 0
    Asset is a vehicle?: Yes
    Type of Vehicle?: Automobile
    Listed Asset?: Yes
    Indian Reservation Property?: No

    According to Pub 946 Table A-1 (pg. 70/112), the depreciation rate for Half-Year Convention of 5-year property are:

    1st year: 20%
    2nd year: 32%
    3rd year: 19.20%
    4th year: 11.52%
    5th year: 11.52%

    But then I see the calculator generating the following:

    1st year: 3,160
    2nd year: 5,100
    3rd year: 3,050
    4th year: 1,875
    5th year: 1,875

    Compared to when I calculated using the rates listed on Pub 946 (Cost basis x rate):

    1st year: 5,400
    2nd year: 8,640
    3rd year: 5,184
    4th year: 3,110.40
    5th year: 3,110.40

    How is the calculator coming up with different numbers? Am I missing something or interpreting this incorrectly? Greatly appreciate your help in advance!

    • Hi Taylor, I’m not able to go through all the steps right now to confirm the calculation.

      But the first difference I see is that your calculation is not accounting for the maximum depreciation amount for vehicles placed into service in 2016.

      These are the amounts, first year, second year etc. of depreciation:

      2016: 3160, 11160, 5100, 3050, 1875

      So, my calculator matches the first year, and since you don’t match the first year, it won’t be possible to match subsequent years.

      And as I recall, there are some variations for listed property as well.

      Hope this helps some.

      • So I did a bit of research and read about the additional rules for listed property on Pub 946 pg. 60. It seems that the maximum deduction for assets placed before 2018 without taking special depreciation is 3,160 first year and then 5,100 for the second year, etc. Is that how you’re getting your numbers? Would like to confirm if this is the case for this scenario. Thanks for replying back Karl!

  • AJ Roderick says:

    Hi Karl,

    I am struggling to understand the depreciation amount for the 2nd year and on. Here is the information:

    Cost basis: $2,076.10
    Business Use: 100%
    Placed into service: 03/31/2017
    Depreciation Method: GDS 200% DB
    Property Class: 5-year
    IRS Convention: Half-year
    179 Deduction: 0
    Qualified Asset: Special Allowance 50%
    Special Allowance: 1,039.00
    Asset is a vehicle?: No
    Type of Vehicle?: N/A
    Listed Asset?: No
    Indian Reservation Property?: No

    Using the following rates:

    1st year: 20%
    2nd year: 32%
    3rd year: 19.20%
    4th year: 11.52%
    5th year: 11.52%
    6th year: 5.76%

    Calculates depreciation expense as – cost basis x rate :

    1st year: 207.67 + 1,039 special allowance
    2nd year: 265.82
    3rd year: 108.45
    4th year: 52.58
    5th year: 46.52
    6th year: 20.58

    Calculator output:

    1st year: 1,247
    2nd year: 332
    3rd year: 199
    4th year: 120
    5th year: 119
    6th year: 60

    Can you explain the 2nd year and on of depreciation? How is it calculating 332… when 830 x 32% = 265? I am assuming I am just missing a step. Thanks for your help in advance!

    • Hello AJ, I don’t have the equation in my head, and I’m not able to sit down and research this. If I did that every time I was asked, I would not have any time left to build this site (I only do it parttime as is). I’ll give you a pointer though. If it were me, I would sit down with the worksheet found in publication 946 and step through the calculation using your numbers. That should reveal the source of the problem. (I guess there’s always a chance that I have something wrong too. However, I have tested this calculator using every example found in the publication.)

    • Robert Valentine says:

      AJ Roderick,

      Here is the way the second year is to be calculated when using the percentages.

      $2,076.10 – $1,038 = $1,038.10 X .32 = $332.19

      The Cost Basis when using percentages is the Cost less any Section 179 less any Bonus depreciation claimed. The result is what you multiply the percentages each year by.

      In your example, you are subtracting not only the Bonus depreciation but also the accumulated depreciation from the cost basis to arrive at the Cost Basis and this is incorrect.

      If you were calculating MACRS depreciation manually without using the percentages, then the way you would calculate depreciation for the second year would be:

      $2,076.10 – $1,038 – $207.67 = $830.43 X 2/5 = $332.17

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