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James purchased a new business asset (three-year personalty) on July 23, 2017, at a cost of $40,000. James takes additional first-year depreciation but does not elect Section 179 expense on the asset.
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James purchased a new business asset (three-year personalty) on July 23, 2017, at a cost of $40,000. James takes additional first-year depreciation but does not elect Section 179 expense on the asset. Determine the cost recovery deduction for 2017

a. $8,333
b. $26,666
c. $33,333
d. $41,665

User Ravi Ram
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1 Answer

6 votes

Answer:

b. $26,666

Step-by-step explanation:

Additional first-year depreciation =40000*0.5 = 20000

MACRS cost recovery = (40000-20000)*0.3333 = 6666

Total cost recovery deduction for 2017= 20000+6000 = 26666

User Johan Rin
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