Bonnie purchased a new business asset (five-year property)on March 10,2013,at a cost of $30,000.She also purchased a new business asset (seven-year property)on November 20,2013,at a cost of $13,000.Bonnie did not elect to expense either of the assets under § 179,nor did she elect straightline cost recovery.Bonnie takes additional first-year depreciation.Determine the cost recovery deduction for 2013 for these assets.

Question

Bonnie purchased a new business asset (five-year property)on March 10,2013,at a cost of $30,000.She also purchased a new business asset (seven-year property)on November 20,2013,at a cost of $13,000.Bonnie did not elect to expense either of the assets under § 179,nor did she elect straight­line cost recovery.Bonnie takes additional first-year depreciation.Determine the cost recovery deduction for 2013 for these assets.

Quizplus · Accepted Answer

The half-year convention applies in this case.Five-year property:
Additional first-year depreciation ($30,000 × .50)$15,000
MACRS cost recovery ($15,000 × .20)3,000
Seven-year property:
 11ea86f6_cc10_c7f2_8084_e3395e427587_TB4134_00

Bonnie Purchased a New Business Asset (Five-Year Property)on March 10,2013,at