A used $35,000 automobile that is used 100% for business is placed in service in 2017. If the automobile fails the 50% business usage test in the second year, no cost recovery will be recaptured.

Question

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If the automobile fails the 50% business usage test in the second year, no cost recovery will be recaptured because the automobile was placed in service in 2017 and the cost recovery period for a passenger automobile is 5 years.

A Used $35,000 Automobile That Is Used 100% for Business