Taxes: Book value on Barge

Suppose you purchase a $10,000 barge — a 10-year asset. Under the MACRS what is the book value of the barge in the 2nd year you own it?

Depreciation in the first year $10,000 x 0.1 = $1000
Depreciation in the second year $10,000 x 0.18 = $1800

Book Value = Cost Basis - Depreciation = 10,000 - (1000 + 1800) = $7200.00

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