Pyle Inc.,a calendar year taxpayer,generated over $10 million taxable income in 2019.Pyle made one asset purchase: new heating and air conditioning system for existing nonresidential real property at a cost of $1,322,000.The system has a 39-year recovery period and was placed in service on February 9.Assuming that Pyle made the Section 179 election with respect to the acquisition,compute Pyle's 2019 cost recovery deduction.

Question

Quizplus · Accepted Answer

The correct answer is B because the cost recovery deduction for the first year is $1,026,777. This is calculated by multiplying the cost of the asset by the applicable percentage for the first year of the recovery period. In this case, the cost of the asset is $1,322,000 and the applicable percentage for the first year of the 39-year recovery period is 2.5641%.

Pyle Inc,a Calendar Year Taxpayer,generated Over $10 Million Taxable Income in in 2019.Pyle