A taxpayer places a $50,000 5-year recovery period asset in service in 2016. This is the only asset placed in service in 2016. Assuming half-year convention, no immediate expensing, what is the amount of bonus depreciation?

Question

A taxpayer places a $50,000 5-year recovery period asset in service in 2016. This is the only asset placed in service in 2016. Assuming half-year convention, no immediate expensing, what is the amount of bonus depreciation?​

Quizplus · Accepted Answer

Bonus depreciation is 50% for qualified property placed in service before January 1, 2018. Since the asset was placed in service in 2016, it is still eligible for bonus depreciation. Therefore, the amount of bonus depreciation will be 50% of the cost of the asset, which is $25,000.

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