In April of 2018,Brandon acquired equipment which is five-year listed property (not an automobile)for $30,000 and used it 70% for business.Brandon did not claim Sec.179 or bonus depreciation.In 2019,his business use of the property dropped to 40%.Which of the following statements is true?
A)The change does not affect Brandon's previous depreciation.
B)Brandon must recapture $2,100 as ordinary income.
C)Brandon must recapture $4,200 as ordinary income.
D)Brandon must amend the previous tax return and recompute depreciation.

Question

Quizplus · Accepted Answer

Brandon must recapture $2,100 as ordinary income because the business use dropped below 50%, requiring a switch to straight-line depreciation and recapture of excess depreciation taken in prior years.

In April of 2018,Brandon Acquired Equipment Which Is Five-Year Listed