Question

Diana acquires, for $82,400, and places in service a 5-year class asset on December 19, 2018....

Diana acquires, for $82,400, and places in service a 5-year class asset on December 19, 2018. It is the only asset that Diana acquires during 2018. Diana does not elect immediate expensing under § 179. She elects additional first-year deprecation.

Diana's total cost recovery deduction for the asset is $______ for 2018.

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Answer #1

Additional first year depreciation is charged by taxpayers to get benefit of additional amount of cost recovery in the first year of service of qualified property. It is also known as bonus depreciation.

In this situation Diana acquires a asset for $82,400, and places it in service on December 19, 2018. Diana elects additional first-year deprecation.

Therefore, Diana's total cost recovery deduction for the asset is $43260 for 2018.

Calculation-

(50% x $82400) + [($82400/2) x 5%] = $43260

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