Question

An asset (not an automobile) put in service in June 2019 has a depreciable basis of $40,000 and a recovery period of 5 years. Assuming bonus depreciation is used, half-year convention and no election to expense is made, what is the maximum amount of cost that can be deducted in 2019?

Answer 1

$40,000

Step-by-step explanation:

Maximum amount of cost that can be deducted is full amount of $40,000. The maximum amount that can be claimed as bonus depreciation is the cost of the asset under consideration. The percentage of claim might be different and applicable according to announced by the Tax department, but the total amount that a person can claim as Depreciation Bonus is the Total cost of that asset.