Question
James purchased a new business asset (three-year personalty) on July 23, 2020, at a cost of...
James purchased a new business asset (three-year personalty) on July 23, 2020, at a cost of $40,000. James takes additional first-year depreciation but does not elect § 179 expense on the asset. Determine the cost recovery deduction for 2020.
a.$26,666
b.$8,333
c.$33,333
d.$40,000
Cora purchased a hotel building on May 17, 2020, for $3,000,000. Determine the cost recovery deduction for 2021.
a.$69,000
b.$59,520
c.$76,920
d.$48,150
Homework Answers
Answer #1
Answer: Option D - $40,000.
Explanation:
The business will eligible to claim a depreciation deduction for 100% of the assets placed in service during the year. Since the value of assets placed in service during 2020 is $40,000, the business would be fully eligible to claim the depreciation for the year
Answer: Option c. $76,920
Explanation:
The Hotel Building is a Non-Residential Realty. The hotel Building qualifies for the 39 year property.
Therefore,
The cost recovery for 2021 = Cost 
1/39
The cost recovery for 2021 = $3,000,000 
0.02564
The cost recovery for 2021 = $76,920
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