On July 17,2014,Kevin places in service a used automobile that cost $25,000.The car is used 80% for business and 20% for personal use.In 2015,he used the automobile 40% for business and 60% for personal use.Determine the cost recovery recapture for 2015.
A)$0
B)$528
C)$2,000
D)$2,500
E)None of these

Question

Quizplus · Accepted Answer

Cost recovery recapture in 2015:
MACRS ($25,000 × .20)= $5,000 (limited to $3,160*);$3,160 × 80% $2,528
Straight-line ($25,000 × .10)= $2,500 (limited to $3,160*);$2,500 × 80% (2,000)
Cost recovery recapture in 2015 $ 528
* These depreciation limits are indexed annually.

On July 17,2014,Kevin Places in Service a Used Automobile That