Question

Bonnie purchased a new business asset (five-year property) on March 10, 2019, at a cost of $30,000. She also purchased a new business asset (seven-year property) on November 20, 2019, at a cost of $13,000. Bonnie did not elect to expense either of the assets under § 179, nor did she elect straight-line cost recovery. Bonnie takes additional first-year depreciation. Determine the cost recovery deduction for 2019 for these assets.

Answer 1

Answer:  The cost recovery deduction for 2019 for these assets is $43000.

Explanation:

New business asset (five year property) purchased March 10, 2019 = $30000

New business asset (seven year property) purchased on November 20, 2019 = $13000

Additional depreciation of the first year is referred as the bonus depreciation.

Also, bonus depreciation in the year 2019 is at 100% of the value of assets bought during this year.

∴ Total assets value = New business asset (five year property) + New business asset (seven year property)

= $30000 + $13000

= $43000

Hence, the cost recovery deduction for 2019 for these assets is $43000.