James purchased a new business asset (three-year personalty) on July 23, 2018, 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 2018.
A) $8,333
B) $26,666
C) $33,333
D) $40,000
E) None of the above

Question

Quizplus · Accepted Answer

The cost recovery deduction for 2018 is $40,000 because James takes additional first-year depreciation, which allows for 100% bonus depreciation on qualified property placed in service after September 27, 2017, and before January 1, 2023.

James Purchased a New Business Asset (Three-Year Personalty) on July