In 2017,a taxpayer purchases a new automobile (5 year recovery)for $56,000 for 100% use in her business.What is the total cost recovery assuming that the taxpayer does or does not elect bonus depreciation on the auto (half-year convention but no immediate expensing)?

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Quizplus · Accepted Answer

Without bonus depreciation, the annual cost recovery would be $56,000/5 = $11,200. With bonus depreciation, the taxpayer can deduct an additional 50% of the cost in the first year, so the total cost recovery would be $11,200 + ($56,000 x 50%) = $11,160.

In 2017,a Taxpayer Purchases a New Automobile (5 Year Recovery)for