A taxpayer places a $50,000 5-year recovery period asset in service in 2018.This is the only asset placed in service in 2018.Assuming half-year convention, bonus depreciation, and taxable income before cost recovery of $5,000, what is the amount of cost recovery in 2018?

Question

Quizplus · Accepted Answer

In 2018, bonus depreciation allows for 100% immediate expensing of qualified property. Therefore, the entire $50,000 can be deducted in the year the asset is placed in service, regardless of the taxable income before cost recovery.

A Taxpayer Places a $50,000 5-Year Recovery Period Asset in Service