Question

On May 2, 2019, Karen placed in service a new sports utility vehicle that cost $60,000 and has a gross vehicle weight of 6,300 lbs. The vehicle is used 60% for business and 40% for personal use. Determine Karen's total cost recovery for 2019. Karen wants to use both §179 and additional first-year depreciation.

Answer 1

Total Cost of Recovery = $27200

Step-by-step explanation:

Cost of business Use = 60%*60000 = $36000

As per section 179

Depreciation capped at $25,000 for SUVs, trucks, and vans with a gross vehicle weight rating of more than 6,000

Depreciation = $25000

As per MACRS

Additional First-year depreciation = (36000-25000)*0.20 = $2200

Total Cost of Recovery = $25000+$2200 = $27200