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Explain the depreciation method you used

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Reference no: EM132182439

Question: In January 20XX, JIM, purchased $350,000 of new MACRS (Modified Accelerated Cost Recovery System) 5-year property in the United States. This equipment was placed in service May 1, 20XX. JIM wants to take as much depreciation in 20XX as possible.

• Calculate the depreciation for 20XX.

• If JIM had been located in a qualified enterprise zone, what would be the depreciation amount?

• Explain the depreciation method you used.

In addition, include the tax benefits (savings) for the first year and the present value of the total tax benefits for the entire 5-year period.

• Discuss how the tax benefits and present value would change if a different method of depreciation was used.

• Also, discuss when JIM would not choose to take as much depreciation as possible.

Reference no: EM132182439

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