n May 5, 2013, Jill purchased equipment for $40,000 to be used in her business. She did not elect to expense the equipment under

Question

3 years ago

5

n May 5, 2013, Jill purchased equipment for $40,000 to be used in her business. She did not elect to expense the equipment under

Section 179 or bonus depreciation. On January 1, 2018, she sells the equipment to a scrap metal dealer. What is the cost recovery deduction for 2018?

Business

1 answer:

kolbaska11 [484] · Answer 1 · 2022-07-30T20:45:24+03:00

Answer:

$1,784

Explanation:

Cost recovery shall be worked out=$40,000*8.92%=$3,568*1/2=$1,784

The cost recovery can only be claimed on assets having useful life more than one year in income tax return. The said deduction can be claimed through form 4562 and the same will be attached in annual income tax return proforma.