On July 17,2015,Kevin places in service a used automobile that cost $25,000.The car is used 80% for business and 20% for personal use.In 2016,he used the automobile 40% for business and 60% for personal use.Determine the cost recovery recapture for 2016.
A)$0
B)$528
C)$2,000
D)$2,500
E)None of the above

Question

Quizplus · Accepted Answer

The cost recovery recapture is calculated based on the change in business use percentage. In 2015, the business use was 80%, and in 2016, it dropped to 40%. The recapture is the difference in depreciation taken for the business use percentage change. The depreciation recapture is calculated as 40% of the original cost ($25,000) minus the depreciation already taken for the 80% business use in 2015. The recapture amount is $528.

On July 17,2015,Kevin Places in Service a Used Automobile That