An asset (not an automobile) put in service in June 2016 has a depreciable basis of $35,000 and a recovery period of 5 years and is the only asset placed in service this year. Assuming bonus depreciation is used, a half-year convention, and the expensing election is made, what is the maximum amount of cost that can be deducted in 2016 (assume no income limitation)?

Question

​An asset (not an automobile) put in service in June 2016 has a depreciable basis of $35,000 and a recovery period of 5 years and is the only asset placed in service this year. Assuming bonus depreciation is used, a half-year convention, and the expensing election is made, what is the maximum amount of cost that can be deducted in 2016 (assume no income limitation)?

Quizplus · Accepted Answer

The maximum amount that can be deducted in 2016 is the full depreciable basis of $35,000 due to the expensing election (Section 179) and bonus depreciation, which allows for the entire cost to be deducted in the first year.

​An Asset (Not an Automobile) Put in Service in June

An Asset (Not an Automobile) Put in Service in June