In July 2015, Cassie purchases equipment for $55,000 to be used in her business. Assuming Cassie has a small net loss from her business prior to the deduction, what is the maximum amount of cost recovery Cassie can deduct?

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The maximum amount of cost recovery that Cassie can deduct is $31,430. This is because she can deduct the full cost of the equipment using Section 179 deduction up to $25,000, and then can claim bonus depreciation for the remaining amount of $30,000 multiplied by 50% bonus depreciation (which equals $15,000), for a total of $40,000. However, since Cassie has a net loss, the deduction is limited to the amount of her net loss, which is $31,430.

In July 2015, Cassie Purchases Equipment for $55,000 to Be