Since the old truck was tangible personal property and was sold during year, only a half-year of depreciation would be allowed for year 2. However, this half-year of depreciation for the year of sale is not built into the table and must be separately calculated. As a result, the year 2 depreciation for the old truck which is 5-year property would be $44,000 × 25.50% × ½ = $5,610.

• The year 2 depreciation for the combine which is 7-year property would be $35,000 × 19.13% = $6,696.

	A	B	C	D	E	F	G
1	Date placed in service	Asset	Cost	Life	Section 179 elected in year 1	Section 179 elected in year 2	Year 2 MACRS depreciation
2	January 1, year 1	Old truck	44,000	5 years	--	--	5,610
3	January 1, year 1	Combine	60,000	7 years	25,000	--	6,696
4	November 1, year 2	New truck	65,000	5 years	--	--	2,438
5	Total year 1 MACRS depreciation						14,744
6	Note: Richard Norton elected out of all applicable bonus depreciation allowances, if any, for year 2 and did not elect the straight-line method of depreciation.

	A	G
1	How much is allowed in year 1 for tax purposes?	--
2	How much is allowed in year 2 for tax purposes?	25,000

question

Richard Norton had a net loss before MACRS depreciation and Section 179 deduction on the farm operations for year 1.

Calculate the depreciation on Richard's farm assets for year 1 using the information in the table below and the 150% MACRS tables found by clicking the tab marked RESOURCES. Note that any property used in a farming business cannot be depreciated using the 200% declining balance method under MACRS for tax purposes.

• In cells F2 and F3, enter the appropriate MACRS basis for each of the assets listed.

• In cells G2 and G3, calculate and enter the year 1 MACRS depreciation for each asset.

• The total year 1 MACRS depreciation will automatically calculate in cell G4.

On November 1, year 2, Richard purchased a new truck, and on November 30, year 2, Richard sold an old truck. The new truck was the only asset purchased during the year. Richard did not elect any Section 179 deduction for year 2.

Calculate the depreciation on Richard's farm assets shown below for year 2 using the information provided and the 150% MACRS tables found by clicking the tab marked RESOURCES. Enter your answers in the shaded spaces provided. The total year 2 MACRS depreciation will automatically calculate in cell G5.

For purposes of this tab (Depreciation) only, assume that Richard had net farm income for year 2 of $200,000 before MACRS depreciation and Section 179 deduction.

In the shaded cells below, answer the following questions related to the $25,000 Section 179 deduction elected in year 1.

I think you should read the question correctly. On the first table you posted, it asks year 2 MACRS depreciation, not year 1. That's why it uses year 2 percentage to compute the depreciation.

Also,  179 deduction is not permited when a net loss exists, the deduction is not allowed in the year. (this is the tax rule)