Custom Depreciation Method Example
A calendar year-end organization places a $17,000 truck in service on June 1, 2007, subject to a 3-year recovery period and using a custom averaging convention.
Assume that the organization set up a custom depreciation method based on the following years and percentages:
|
Year |
Percentage |
|
1 |
14.58% |
|
2 |
38.00% |
|
3 |
37.00% |
|
4 |
10.42% |
|
Total |
100.00% |
If you multiply the depreciable basis ($17,000) by the percentage for each year, the results are:
|
Year |
Calculation |
Depreciation |
|
2007 |
$17,000 x 14.58% |
$ 2,478.60 |
|
2008 |
$17,000 x 38% |
6,460.00 |
|
2009 |
$17,000 x 37% |
6,290.00 |
|
2010 |
$17,000 x 10.42% |
1,771.40 |
|
|
Total |
$17,000.00 |