Final answer:
The cost recovery limits for an automobile placed in service in 2014 will remain consistent with the 2014 limits in subsequent years, including 2016.
Step-by-step explanation:
The limitation for cost recovery of an automobile is determined based on the cost recovery limits for the year the automobile is placed in service. Therefore, if an automobile is placed in service in 2014, all subsequent years' limitations, including 2016, will be based on the cost recovery limits that were in effect for 2014.
It is essential to be compliant with the IRS's guidelines for depreciation and cost recovery. Now, according to IRS regulations, the Modified Accelerated Cost Recovery System (MACRS) is used for depreciating most types of property, and the limits can be updated annually to account for inflation and other economic factors. However, once the cost recovery limits are set for the year the property is placed in service, they remain consistent for that property in subsequent years.