On May 15,2011,Brent purchased new farm equipment for $120,000.Brent used the equipment in connection with his farming business.Brent does not elect to expense assets under § 179.Brent does elect not to take additional first-year depreciation.Determine the cost recovery deduction for 2011.

Question

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The cost recovery deduction for 2011 is $12,852. This is calculated by multiplying the cost of the equipment ($120,000) by the applicable depreciation rate (10.5%).

On May 15,2011,Brent Purchased New Farm Equipment for $120,000