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On April 15, 2017, Andy purchased some furniture and fixtures (7-year property) for $11,000 to be...

On April 15, 2017, Andy purchased some furniture and fixtures (7-year property) for $11,000 to be used in his business. He did not elect to expense the equipment under §179 or bonus depreciation. On June 30, 2019, he sells the equipment. What is the cost recovery deduction for 2019?

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Answer #1

Calculation of Cost Recovery Deduction for 2019:

Personal Property Cost Recovery Rate

Recovery Year 5 year Property 7 year Property
1 20% 14.3%
2 32% 24.5%
3 19.2% 17.5%
4 11.5% 12.5%
5 11.5% 8.9%
6 5.8% 8.9%
7 8.9%
8 4.5%
100% 100%

On June 30, 2019, he sells the equipment, therefore Cost Recovery Deduction will be half for 2019 as it was sold after 6 months.

Cost Recovery Deduction = 11000 * 17.49% * 1/2

= 961.95

= 962 (Rounded Off)

Hence, cost recovery deduction for 2019 is $ 962.

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