Final answer:
Mary's 2023 and 2024 cost recovery deductions for her car purchase can be calculated based on the percentage of business, production of income, and personal use. The deductions for both years amount to $68,000. There is no cost recovery recapture in 2024.
Step-by-step explanation:
To compute Mary's 2023 and 2024 cost recovery deductions, we need to calculate the depreciation expense for each year. In 2023, the car was used 60% for business, so the business-use portion of the car's cost is $68,000 * 60% = $40,800. Since the car was used 20% for production of income and 20% for personal use, the production-of-income-use and personal-use portions of the car's cost are both $68,000 * 20% = $13,600. The 2023 cost recovery deduction will be the sum of these amounts, which is $40,800 + $13,600 + $13,600 = $68,000.
In 2024, the car's usage changed. The business-use portion is now $68,000 * 40% = $27,200, the production-of-income-use portion is $68,000 * 30% = $20,400, and the personal-use portion is also $68,000 * 30% = $20,400. The 2024 cost recovery deduction will be the sum of these amounts, which is $27,200 + $20,400 + $20,400 = $68,000.
Since Mary did not elect immediate expensing under § 179 and did not claim any available additional first-year depreciation, there will be no cost recovery recapture in 2024.