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12 December, 15:01

Bonnie purchased a new business asset (five-year property) on March 10, 2019, at a cost of $30,000. She also purchased a new business asset (seven-year property) on November 20, 2019, at a cost of $13,000. Bonnie did not elect to expense either of the assets under § 179, nor did she elect straight-line cost recovery. Bonnie takes additional first-year depreciation. Determine the cost recovery deduction for 2019 for these assets.

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  1. 12 December, 18:04
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    Answer: The cost recovery deduction for 2019 for these assets is $43000.

    Explanation:

    New business asset (five year property) purchased March 10, 2019 = $30000

    New business asset (seven year property) purchased on November 20, 2019 = $13000

    Additional depreciation of the first year is referred as the bonus depreciation.

    Also, bonus depreciation in the year 2019 is at 100% of the value of assets bought during this year.

    ∴ Total assets value = New business asset (five year property) + New business asset (seven year property)

    = $30000 + $13000

    = $43000

    Hence, the cost recovery deduction for 2019 for these assets is $43000.
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