Augie purchased one new asset during the year (five-year property)on November 10,2014,at a cost of $650,000.She would like to use the § 179 election if available.The income from the business before the cost recovery deduction and the § 179 deduction was $600,000.Determine the total cost recovery deduction with respect to the asset for 2014.
A)$32,500
B)$56,250
C)$130,000
D)$150,000
E)None of these

Question

Quizplus · Accepted Answer

The mid-quarter convention applies to the MACRS calculation and § 179 is not available as the asset cost exceeds $225,000.
MACRS cost recovery ($650,000 × .05)$ 32,500

Augie Purchased One New Asset During the Year (Five-Year Property)on