On May 26,2010,Jamal purchased machinery for $30,000 to be used in his business.He did not elect to expense the equipment under §179 or the bonus.On October 10,2014,he sells the machinery to a scrap metal dealer.What is his cost recovery deduction for 2014 rounded to the nearest dollar?

Question

Quizplus · Accepted Answer

The cost recovery deduction for 2014 is $1,340. This is calculated by taking the original cost of the machinery ($30,000) and dividing it by the recovery period (5 years). The resulting amount ($6,000) is then multiplied by the percentage of the recovery period that has elapsed in 2014 (22.33%).

On May 26,2010,Jamal Purchased Machinery for $30,000 to Be Used