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Debra acquired the following new assets during 2019: Date Asset Cost April 11 Furniture $40,000 July...

Debra acquired the following new assets during 2019: Date Asset Cost April 11 Furniture $40,000 July 28 Trucks 40,000 November 3 Computers 70,000 Determine Debra’s cost recovery deductions for the current year. Debra does not elect immediate expensing under § 179. She does not

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Answer #1

The mid-quarter convention must be used because the cost of the computers acquired in the fourth quarter exceeds 40% of the cost of all the personal property acquired during the year ($70,000/$150,000 = 47%).
Furniture (7-year class property)
MACRS cost recovery
[$40,000 × .1785] $ 7,140
Trucks (5-year class property)
MACRS cost recovery
[$40,000 × .15] 6,000

Computers (5-year class property)
MACRS cost recovery
[$70,000 × .05] 3,500
Total cost recovery $16,640

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